The war with Iran is wreaking havoc on drivers all over the world.
For the first time in more than three years, the average price of a gallon of gas rose above $4 per gallon on Monday. It’s the sharpest monthly rise in decades, according to data collected by price tracking service GasBuddy, as the U.S.-Israeli war on Iran roiled global energy markets.
The last time gas hit $4 per gallon was in August 2022 after Russia invaded Ukraine. According to a report from Reuters, some analysts are calling this level a psychological barrier for consumers. Prices for crude oil have also surged, along with prices for many goods, since Iran blocked most shipping through the Strait of Hormuz.
U.S. national average retail gasoline prices have climbed about $1.06 a gallon, or 36%, since the U.S. and Israel attacked Iran at the end of February. The monthly increase in retail gasoline prices in March is the steepest in GasBuddy data going back to 2000, according to the Reuters report.
“The price spike will impact near-term economic data,” Macquarie analysts said last week about the possibility of U.S. gasoline average surging past $4 a gallon. “There should be higher inflation figures and a potential lift to nominal spending growth,” the analysts said.
Pump prices could climb further as crude oil prices have kept surging on signs of escalation in the Middle East war. On Monday, U.S. oil futures settled above $100 a barrel and stayed near that level on Tuesday, up around $33 a barrel since the U.S. and Israel attacked Iran at the end of February, Reuters reported.
“(Oil) prices now face a higher-for-longer baseline,” Societe Generale analysts said on Monday, according to the report.
