Americans are feeling the sting at the pump. The national average for regular gas hit $4.30 a gallon on Thursday, up from $3.99 a month ago, according to the American Automobile Association. A year ago, it was $3.18. Prices are the highest since the Iran war began, surpassing even the peaks of the Russia-Ukraine conflict.
The United States imports only 8% of its oil from the Middle East, yet domestic prices are driven by global markets. “Oil literally flows to the highest price,” said Mark Zandi, chief economist at Moody’s Analytics. If a tanker can get more in Malaysia than in Rotterdam, that’s where it goes.
Experts say no relief is coming soon. James Cox of Harris Financial Group predicts high prices through the end of 2026. The Strait of Hormuz remains risky, and a fragile ceasefire on April 8 has done little to ease trader anxiety. “That premium is probably going to persist for some time,” Cox added.
Oil infrastructure damaged in the Iran war will take years to rebuild, according to Kate Gordon of California Forward. The world’s supply will stay pinched. As Zandi put it: “There’s no going back to what we had. At least not this year.”