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By Hugh Cameron
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Pump prices in America are once again subject to geopolitical upheaval on the other side of the globe, as U.S. and Israeli strikes on Iran—and Tehran’s multipronged retaliation strategy—are poised to disrupt global energy flows and strain household budgets.
Reducing gas prices had been one of President Donald Trump’s marquee campaign promises, and the administration has been eager to tout the progress made in this regard since he returned to office in January 2025. While the president’s recent assertion—that these are "now below $2.30 a gallon in most states"—contradicts official figures from AAA, prices have continued to tick down and have made $3 appear more of a ceiling than a floor for the foreseeable future.
But the weekend’s developments promise to upset, at least temporarily, this multi-year trend.
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In the operation code-named "Epic Fury," the U.S. and Israel jointly began launching strikes on Iran on Saturday, killing the country’s supreme leader Ayatollah Ali Khamenei along with several senior officials. Iran swiftly retaliated by launching its own barrage against Israel, as well as U.S. military bases across the Gulf region.
Global oil prices have moved sharply higher since this escalation. Brent crude—the international benchmark—hit a 52-week high on Monday morning, and some have forecast that the conflict could push prices close to the $100-per-barrel level not seen since the summer of 2022.
Mark Zandi, chief economist at Moody’s Analytics, told Newsweek that persistent rising prices are likely to "weigh on growth and push inflation higher."
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How Will the Iran Conflict Impact US Prices?
Since crude oil typically accounts for half the cost of a gallon of gasoline, changes in the price of the former flow proportionately into the latter. And while retail prices tend to trail crude by a few days, experts note that a sustained rise could erase some of the relief U.S. drivers have seen at gas stations in recent months.
"A good rule of thumb is that every sustained $10 per barrel increase in oil prices will increase the cost of a gallon of regular unleaded by 25 cents," Zandi told Newsweek.
Much of the current anxiety surrounding rising crude prices—and pump prices by extension—relates to Iran’s unique positioning and its control over oil flows, rather than supplies, according to Arielle Ingrassia, an associate director and investment specialist at the U.K. wealth management firm Evelyn Partners.
Although Iran accounts for less than 5 percent of global oil output—none of which flows directly to the U. S.—it has significant influence over the Strait of Hormuz, restrictions to which can rapidly roil markets.
"Oil markets are highly sensitive to geopolitical risk in the Gulf. Iran is a significant exporter, and around a fifth of global oil supply passes through the Strait of Hormuz," said Ingrassia. "While the Strait remains open, even the threat of disruption can push up shipping insurance costs, deter tanker traffic and create delays, tightening supply conditions at the margin."
"The Strait of Hormuz is one of the most critical choke-points for global oil flows," added David Warrick, EVP at the supply chain risk management firm Overhaul. "Any disruption or even perceived risk in that corridor can push crude prices higher almost immediately, and those increases tend to work their way through to U.S. fuel markets."
On Saturday, a European Union naval official told Reuters that Iran’s Revolutionary Guard had prohibited ships from passing through the strait. Over the weekend, multiple shipping firms said they would be avoiding this passage in the interests of their crews’ and vessels’ safety, including the logistic giant Maersk.
Analysts say the pump bump resulting from the situation in Iran hinges on whether Hormuz traffic returns to normal, and how short-lived the wider tensions turn out to be.
"The path for oil depends primarily on whether disruption remains contained or escalates into a material supply shock—particularly involving the Strait of Hormuz," Ingrassia said.
As well as supplies being cut off or forced to reroute, analysts have said a worst-case scenario would include direct strikes by Iran on Gulf production or processing, or a broader regional escalation that could chase Brent crude toward the $100-per-barrel mark. In contrast, a swift resolution to the conflict or hostilities being contained at their current level—with flows continuing and the U.S. potentially tapping its Strategic Petroleum Reserve as a buffer for domestic prices—would contain the impact.
"If flows continue, prices are likely to reflect a geopolitical risk premium. If supply were meaningfully disrupted, the move could be sharper and more disorderly," said Ingrassia. "At this stage, markets are pricing uncertainty rather than a sustained loss of supply, and global inventories provide some buffer."
On Sunday, a group of eight OPEC+ nations announced that they would be modestly upping April production by over 200,000 barrels of oil per day "to support market stability."
But such a boost can only quell global prices if this spare capacity can be easily transported, and recent Iranian attacks have tilted the dial toward the worst-case outcome.
On Monday, QatarEnergy, the country’s largest state-run energy firm, said it had halted production of liquefied natural gas (LNG), following "military attacks" on its facilities. Meanwhile, Bloomberg reports that Saudi Aramco will be temporarily shutting the 550,000 barrel-per-day Ras Tanura refinery as a precaution after a fire broke out at the plant after an Iranian drone attack.
"The threat to security of supply is here and now," said Bruegel analyst Simone Tagliapietra, quoted in Bloomberg. "The extent of it will depend on the duration of the shutdown, but we are now into a new scenario."
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