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By Hugh Cameron
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Gas prices have soared to their highest level since President Donald Trump returned to the White House last January, highlighting the early domestic impacts of his Iran operation on American motorists.
The current national average cost for regular gas stands at $3.32, according to AAA, up from last week’s average of $2.98 and $3.11 this time last year. And GasBuddy data, based on live user-reported estimates, shows that the average price of regular unleaded gas has increased 31.8 cents over the past week and sits at $3.32 per-gallon, a level not seen since September 2024.
And while they remain well below the $5-per-gallon mark reached in mid-2022, during his President Joe Biden's tenure and following Russia's invasion of Ukraine, prices are now higher than during either of Trump's terms.
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Why It Matters
Cutting gas prices had been one of Trump’s marquee campaign promises, and the administration has been eager to tout the progress since the beginning of his second term. Prices were previously inching toward the $2 mark, but the military action in Iran has reversed the trend.
As analysts have warned, and as seen following the invasion of Ukraine, disruptions to oil and natural gas flows ripple through the entire economy, raising gas prices, hiking businesses' operating costs and straining household budgets.
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What To Know
In the operation code-named "Epic Fury," the U.S. and Israel began launching coordinated strikes on Iran on Saturday, killing the country’s supreme leader, Ayatollah Ali Khamenei, along with dozens of senior officials. Iran has retaliated by launching its own barrage against Israel, as well as military and economic targets across the Gulf region while attempting to throttle shipments through the Strait of Hormuz.
Global oil prices have moved sharply higher as a result. Brent crude—the international benchmark—has soared past $90-per-barrel and is closing in on the $100 level not seen since 2022.
According to analysts, pump prices typically trail crude by a few days, and the oft-cited heuristic is that each sustained $10-per-barrel increase in the price of the former will push the latter up by 25 cents. But the U.S. has said it is implementing measures to try to stem the rally.
On Wednesday, Treasury Secretary Scott Bessent said the administration was preparing to make a "series of announcements" regarding how the U.S. could prop up supply flows in the region.
Earlier in the week, Trump announced that the U.S. Development Finance Corporation (DFC) would "provide, at a very reasonable price, political risk insurance and guarantees" for all maritime trade in the Gulf, and that the U.S. Navy was prepared, if necessary, to "begin escorting tankers through the Strait of Hormuz."
Some doubt that it could be carried out, with Kpler freight analyst Matt Wright telling CNBC that it would take an “inordinate amount of time” for the Navy to escort the “hundreds and hundreds of vessels” stalled.
What People Are Saying
President Donald Trump told Reuters on Thursday about gas prices: "I don't have any concern about it. They'll drop very rapidly when this is over, and if they rise, they rise, but this is far more important than having gasoline prices go up a little bit."
Torbjorn Soltvedt, principal Middle East analyst at Verisk Maplecroft, told Newsweek earlier in the week: “The global oil market now faces a situation where critical energy infrastructure in the Middle East is being hit directly at the same time as traffic through the Strait of Hormuz has ground to a halt.
“If Iranian attacks against Gulf energy infrastructure and the threat to shipping persist over the next two weeks, the impact will be far greater, and $100 per barrel becomes a realistic prospect.”
What Happens Next
In addition to the still-developing DFC insurance plan and the possibility of naval support for ships in the Strait of Hormuz, Interior Secretary Doug Burgum said Thursday that “everything is being considered” to tame the rise in oil prices, Bloomberg reported.
Other options analysts have identified include tapping the U.S. crude reserves, allowing the Treasury to trade oil futures and loosening current fuel-blending requirements.
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