Fuel prices hit records as Iran blocks Strait of Hormuz

US households face higher costs for food, travel and goods after diesel and gasoline prices reached multi-year highs tied to the closure of the Strait of Hormuz. The narrow waterway carries roughly 20 percent of global seaborne crude oil, or about 20 million barrels per day, according to the International Energy Agency. Iran’s effective shutdown since the February start of the US-Israel conflict with Iran has cut daily transits by 95 percent, per UN Conference on Trade and Development data.

National average gasoline stood at $4.55 per gallon as of May 22, up about $1.50 since late February, said Denton Cinquegrana of Dow Jones Energy. Diesel averaged $5.64 nationally on May 22 and reached $6.30 in the Chicago area and $6.14 statewide in Illinois on May 15, according to GasBuddy—both records that surpassed June 2022 peaks. The price of diesel in the Chicago metro rose 71 percent year over year from $3.63.

Food truck operator Ricardo Guerrero in Cicero now spends more than $800 every five days on fuel for three trucks, up from about $500. He has raised menu prices 10 percent and drawn on savings to meet payroll for 15 employees. Trucking firms report rerouting to cheaper fuel states and accelerating purchases of electric trucks. Fertilizer costs rose 30 percent year over year, the Green Markets index showed, while an American Farm Bureau Federation survey found 48 percent of Midwest farmers struggling to secure supplies. Shipping companies added surcharges: FedEx at 27.25 percent and UPS at 27.75 percent on domestic ground packages; the Postal Service imposed an 8 percent package rate increase through January 2027.

President Trump stated he opposes any fees for Hormuz passage and has released oil from the Strategic Petroleum Reserve, proposed a federal gas tax holiday, and waived the Jones Act to speed coastal fuel movements. AAA projects 39 million to 45 million Americans will travel at least 50 miles over Memorial Day weekend despite the prices.

Energy analysts say even an immediate end to hostilities would not restore prewar prices quickly. Refining and logistics timelines run 30 to 60 days, damaged Gulf infrastructure requires inspection, and very large crude carriers move at roughly 13 knots. Cinquegrana’s base case is that recovery will take at least as long as the conflict itself; estimates range from six months to two years. Patrick De Haan of GasBuddy noted that pump prices could fall on sentiment within days but that summer averages might stay in the mid-to-upper $3 range only if the strait reopens, or approach $5 if it stays closed.