US oil prices are reflecting the direct cost of war as the Iran campaign disrupts global energy supply for a third consecutive week, with pump prices approaching $3.85 per gallon. Analyst Patrick De Haan has forecast that Monday’s national average could reach $3.80 to $3.85 per gallon, while $4 gasoline remains within reach. The conflict has created what energy market observers describe as one of the most severe supply disruptions in recent memory.
When the US-Israel campaign against Iran opened on February 28, it set in motion a chain of supply disruptions that has steadily eroded the global oil supply available to international buyers. From below $3 per gallon before the war began, the national gasoline average has risen 23% to $3.70, a rapid escalation that has directly affected consumer purchasing power and business operating costs. Three weeks of sustained military operations have made any near-term price improvement highly unlikely.
The US strike on Kharg Island last Friday, targeting the heart of Iran’s oil export infrastructure, is the most recent in a series of attacks that have progressively removed oil processing and export capacity from the global market. Iran’s maintenance of the Strait of Hormuz blockade continues to deny international markets access to roughly 20% of their usual daily oil supply. Brent crude traded between $103 and $106 per barrel Monday, while US crude held near $94 following a brief surge to $100 on Sunday.
California bears the heaviest domestic price burden, with state averages above $5 per gallon and some Los Angeles stations listing prices above $8. Diesel for commercial transport sectors could reach $5.05 to $5.15 per gallon nationally. The CEOs of Exxon, Conoco, and Chevron have each warned White House officials about the escalating supply crisis, with Exxon’s Darren Woods specifically highlighting how speculative investors can amplify the market impact of physical supply shortfalls.
US equity markets opened modestly higher Monday, with the S&P 500 gaining around 1% following a brief retreat in crude prices. Major oil company stocks have reached all-time highs since hostilities began. The cost of the Iran war, measured in terms of its impact on US oil prices and consumer budgets, continues to mount with each passing week of conflict.