US oil prices remain in crisis mode as the Iran war enters its third week, with critical global shipping routes blocked and oil production infrastructure under attack. Analyst Patrick De Haan has forecast pump prices of $3.85 per gallon Monday, while $4 gasoline remains a near-term possibility. The combination of military strikes and strategic blockades has created a deeply strained global energy supply environment.
Before the US and Israel launched their campaign against Iran on February 28, Americans were paying less than $3 per gallon for regular gasoline. In fewer than three weeks, that average has risen 23% to $3.70, driven by the compound effect of infrastructure strikes and shipping lane closures. The rapid escalation of pump prices has placed significant financial strain on both households and businesses.
Friday’s US strike on Kharg Island, Iran’s primary oil processing hub, represented one of the most significant attacks on energy infrastructure since the conflict began. Iran’s blockade of the Strait of Hormuz, through which roughly 20% of global oil supply moves daily, has further constrained available supply for international buyers. Brent crude moved between $103 and $106 per barrel Monday, while US crude was trading at $94 following a brief Sunday spike to $100.
California is experiencing the most acute domestic price pressures, with state averages above $5 per gallon and some Los Angeles stations charging over $8. Diesel prices for trucking and freight companies may reach $5.05 to $5.15 per gallon nationally. The heads of Exxon, Conoco, and Chevron have all engaged the White House to raise urgent supply concerns, with Exxon’s CEO Darren Woods specifically flagging the risk of speculative market activity driving prices beyond what supply conditions alone would support.
US equities gained modestly Monday morning following a brief oil price retreat, with the S&P 500 up about 1%. Oil company shares have surged to historic highs since the conflict began, reflecting the financial windfall that high oil prices provide to energy producers. For the broader American economy, however, the crisis represents a persistent and growing headwind that will require resolution of the military conflict to fully address.