Here's How Much Gas Prices Could Rise After U.S. Strikes in Iran
- Trump’s ‘Big, Beautiful Bill’ Hits the Senate — Here’s What They Kept and Cut
- This Common HSA Mistake Could Cost You Thousands of Dollars
- The U.S. Dollar Is Weak. Here's How You Can Still Save on Summer Travel
- 3 Money Moves People Are Making Because They're Nervous About the Economy
- Trump Administration Halts Student Debt Collections for Social Security Recipients
- Should You Put Your Credit Score on Your Dating Profile?
- When Social Security Recipients Will Get Their Checks in June
- 8 Money Experts Share How They're Preparing for Trump's Tariffs
- Dollar Scholar Asks: Could Trump's Tariffs Actually Help Me Save Money?
- What Trump's New Tariff Announcements Could Mean for Your Wallet
U.S. strikes on Iranian nuclear sites and recent escalations in the Iran-Israel conflict have introduced fresh uncertainty into the global oil market. As the world waited to see how Iran would respond to Saturday's intervention, experts warned Monday morning that the cost of gasoline would likely rise this week.
But Iran's weaker-than-expected retaliation diminished those initial fears. Oil prices dipped suddenly on Monday after Iran launched missiles at U.S. bases in Qatar and Iraq, possibly because the attack was less severe than anticipated and, crucially, Iran did not target an oil supply route.
"This is a far cry from disrupting the Strait of Hormuz," Denton Cinquegrana, chief oil analyst at the Oil Price Information Service, tells Money.
The strait, which connects the Persian Gulf and the Gulf of Oman, is a key shipping lane that about 20% of global oil flows through. Because of its importance, analysts raised concerns following the U.S. strikes that Iran might respond by attempting to close the Strait of Hormuz.
Obstructing maritime traffic by shutting down the strait "would have immediate and significant ramifications for global oil markets and regional stability," Kristian Kerr, head of macro strategy at LPL Financial, said in a note Monday morning.
According to Goldman Sachs, disruption to the strait could cause oil prices to soar above $100 per barrel.
CNN reports that the country's parliament has approved a motion to close the strait, but the decision is ultimately up to Iran's Supreme National Security Council. As Cinquegrana explains in an email, shutting it down is "easier said than done" and not without consequence to Iran itself: "They would also be shooting themselves in the foot, as they use that route to export oil," he adds.
For everyday Americans watching the news, attacks aimed at U.S. military bases, worsening conflict in the Middle East and general nuclear fears are top of mind. But the cost of gas at home is always a concern when war breaks out in this way. Many drivers, for instance, remember how difficult it was to pay for gas when prices surged in the aftermath of Russia's invasion of Ukraine in 2022.
Even the president appeared worried about possible spikes in oil and gas prices. In a post on Truth Social Monday morning, President Donald Trump wrote, "EVERYONE, KEEP OIL PRICES DOWN. I'M WATCHING."
Why war in Iran affects gas in America
Crude oil is the key component in gasoline, accounting for about 49% of what drivers pay for a gallon of gas. So when crude oil prices climb, so do gas prices. As a general rule of thumb, gas prices usually move by about 25 cents with a $10 swing in the price of oil.
From early April to mid-June, Brent crude oil was trading below $70 per barrel, and that helped gas prices drop below $3 in over 30 states. Amid the onset of the war between Israel and Iran, oil prices are up about 8.5% in June. They stood at $70 as of press time Monday after briefly hitting $79 per barrel in Sunday trading.
Gas prices are averaging around $3.22 per gallon, up 8 cents in the past week, according to AAA. Monday morning, before the Iranian strikes, Patrick De Haan, head of petroleum analysis at GasBuddy, said in a video gas prices could rise 10 to 15 cents this week — a "slow but steady increase in gas prices," with diesel seeing the most dramatic uptick.
But De Haan adjusted his forecast after oil prices dropped by about $5 when Iran fired missiles that were intercepted.
"Iran's retaliation may now be over, which is why [West Texas Intermediate]/Brent crude oil prices are tanking," he wrote in an update on X, formerly known as Twitter. "While most areas will still see [gas prices] inching up, by later this week, we *could* start to see decreases to national average."
Make no mistake, though: Geopolitical risk related to this war is already priced in to the cost of oil, so you're already paying for it at the pump. Further escalations could lead to greater price disruptions.
More from Money:
5 Best Auto Refinance Companies of 2025
Trump Wants Lower Interest Rates. Here's Why the Fed Isn't Budging
Trump’s ‘Big, Beautiful Bill’ Hits the Senate — Here’s What They Kept and Cut
