Three weeks of military conflict with Iran have taken a heavy toll on US oil prices, with Monday expected to bring yet another turbulent session for energy markets. Patrick De Haan, a respected petroleum analyst, projects gasoline prices of $3.80 to $3.85 per gallon Monday, with the $4 level remaining a near-term possibility. The prolonged conflict has made energy price predictability nearly impossible for American consumers and businesses.
The price crisis was triggered on February 28 by the opening of the US-Israel campaign against Iran, which immediately sent global oil prices climbing. The national gasoline average has since risen 23% to $3.70, up from below $3 before the conflict began. Every new military development seems to drive another upward lurch in oil prices, creating a climate of sustained consumer uncertainty.
The US strike on Kharg Island on Friday represented one of the most significant escalations to date, targeting a facility critical to Iran’s crude oil processing and exports. Iran’s ongoing blockade of the Strait of Hormuz—through which about 20% of global oil supply passes—continues to deny world markets access to a major shipping corridor. Brent crude fluctuated between $103 and $106 per barrel Monday, while US crude hovered at $94 after briefly reaching $100 on Sunday.
American consumers in California are paying more than $5 per gallon on average, with parts of Los Angeles reporting prices above $8. Diesel prices for the trucking and rail industries could reach $5.05 to $5.15 per gallon across the country. The CEOs of Exxon, Conoco, and Chevron have each warned White House officials about the dangerous convergence of supply disruption and speculative market forces, with Darren Woods of Exxon taking a particularly direct approach in his briefing.
Wall Street opened Monday with mild gains following a brief oil price retreat, with the S&P 500 up roughly 1%. Major oil company stocks have reached record highs since the conflict began, underlining the sector’s financial windfall from the crisis. For the broader American economy, however, the energy shock represents a growing drag on growth, spending power, and consumer confidence.