US Oil Prices Near $4 Threshold as Iran Conflict Continues to Disrupt World Markets

US oil prices are approaching the psychological $4-per-gallon threshold as the Iran conflict enters its third week and continues to disrupt global energy markets. Analyst Patrick De Haan has placed his Monday pump price forecast at $3.80 to $3.85 per gallon, noting that a rise to $4 is still possible but not certain in the immediate term. Three weeks of sustained military conflict have fundamentally changed the energy pricing environment for American consumers.
The crisis was set in motion on February 28, when the US and Israel launched the first round of strikes on Iran in a campaign that has since expanded significantly. The national gasoline average has climbed 23% from below $3 to $3.70 per gallon, reflecting the progressive disruption of both oil production capacity and key global shipping routes. The speed of the price increase has caught many consumers and businesses off guard.
Last Friday’s US strike on Kharg Island, the hub of Iran’s petroleum export network, was among the most significant targeting of energy infrastructure since the conflict began. Iran’s blockade of the Strait of Hormuz—which carries approximately one-fifth of global oil supply—has removed a substantial volume of petroleum from world markets. Brent crude traded between $103 and $106 per barrel Monday, while US crude fluctuated near $94 after briefly cresting $100 on Sunday.
The domestic consumer impact has been most severe in California, where averages have risen above $5 per gallon and some Los Angeles stations are listing prices above $8. Diesel costs for the freight transport industry could reach $5.15 per gallon across the country. Top executives from Exxon, Conoco, and Chevron have each briefed White House officials on the worsening supply situation, with Exxon’s Darren Woods specifically warning about the amplifying effect of speculative market activity.
US stocks began the week in positive territory, with the S&P 500 gaining around 1% following a brief retreat in crude prices. Major oil company shares have surged to all-time highs since the conflict began, generating enormous profits for the energy sector. For American households and businesses, however, the crisis continues to represent a growing economic challenge that will only ease with a diplomatic resolution to the conflict.