Fuel prices hit records as Iran blocks Strait of Hormuz

Even if fighting between the United States, Israel and Iran ended tomorrow, American drivers would not see gasoline prices return to prewar levels for many months. National averages now stand at $4.55 a gallon, roughly $1.50 above where they sat before the conflict began in late February. Energy analysts say the lag reflects the time required to verify the safety of infrastructure in the Persian Gulf and to restore normal tanker traffic through the Strait of Hormuz, which normally carries about 20 million barrels of oil a day.

The price spike has already altered Memorial Day plans for millions of households. AAA projects that more than 39 million people will still drive somewhere this weekend, yet many are shortening trips or combining errands to limit refueling stops. On the West Coast, where refineries depend heavily on imported crude, regular gasoline has reached $6.14 a gallon in California and $5.70 in Washington. Diesel, the fuel that moves most freight, hit record territory in Illinois at $6.14 a gallon and $6.30 in the Chicago metro area, both surpassing peaks set after Russia’s 2022 invasion of Ukraine.

Those diesel increases feed directly into consumer prices. Food-truck operator Ricardo Guerrero in suburban Chicago now spends several hundred dollars more each week on fuel to reach downtown locations. Logistics managers note that nearly every shelf item travels at least part of its journey by truck or rail, so higher diesel costs surface in grocery bills long before they appear at the pump. Separate data show ground beef already at a record $6.90 a pound, compounding the effect on summer cookouts.

The White House has tried several steps to blunt the pain. The administration has drawn down the Strategic Petroleum Reserve at a record pace, proposed a temporary federal gas-tax holiday, and waived the Jones Act to allow foreign-flagged vessels to carry fuel between U.S. ports. Officials argue these moves will eventually stabilize markets. Industry analysts, however, caution that physical supply chains cannot adjust overnight. Refining a barrel of crude into finished gasoline normally takes 30 to 60 days, and any damage to export terminals or pipelines in the Gulf adds further delays.

Traders also point out that crude markets price in risk. Even modest fears of renewed disruptions keep futures elevated. Once those fears recede, the descent in retail prices tends to be gradual, a pattern observed after earlier supply shocks. Denton Cinquegrana of Dow Jones Energy estimates that a full $1.50 reversal could remain out of reach through the rest of 2026.

For working households already devoting a larger share of income to food and transportation than at any point since the 1990s, the persistence of higher energy costs tightens budgets regardless of political promises. The current episode illustrates how quickly a regional conflict can transmit price pressure across an entire economy, and how slowly those pressures ease once the immediate fighting stops.