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Iran Conflict Roils Oil Markets, Driving Rapid U.S. Fuel Price Spikes

Threats to tanker traffic through the Strait of Hormuz are quickly feeding through to pump prices.

Overview

  • The national average for regular gasoline is around $3.48–$3.49, roughly 48–50 cents higher than a week ago, after crude briefly neared $120 a barrel Monday before retreating below $90.
  • California’s average hit $5.20, with some Bay Area stations posting prices above $6 and diesel nearing $7, while Arizona rose to about $3.86 and Palm Beach County, Florida, reached $3.62 after a $0.61 weekly jump.
  • Diesel and home-heating oil are rising faster than gasoline, with Phoenix truck stops charging about $4.90 for diesel and New England wholesalers increasing heating-oil costs by 50 cents in a day.
  • Roughly one-fifth of global petroleum moves through the Strait of Hormuz, and slowed tanker traffic is heightening supply risk; analysts note pump prices typically lag crude by days to weeks and often climb about 25 cents for each $10 increase in oil.
  • The administration characterizes the price surge as short-term, directs the U.S. Development Finance Corporation to provide up to about $20 billion in risk insurance for Gulf shipping, and signals Navy escorts for tankers if needed, as strategic reserve releases are discussed but not deployed.