Key Points – The escalating conflict between Israel and Iran, coupled with President Trump’s aggressive rhetoric, is likely to cause a spike in US gas prices.
-According to GasBuddy, the national average, currently at $3.08 per gallon, could rise by 10 to 20 cents in the coming days due to a “risk premium” being added to oil prices over fears of a wider war.
-While no actual supply has been disrupted yet, the primary concern is that Iran could attempt to shut down the Strait of Hormuz, a critical chokepoint for global oil exports, which would send prices soaring.
Gas Prices to Soar if Trump Hits Iran?
Turmoil in the Middle East tends to lead to high gas prices back in the U.S. Will that be the case if the U.S. joins Israel’s attack against Iran?
The stock market has been dropping, including a 300-point slide in the Dow on Tuesday, after Donald Trump spent the day threatening the Supreme Leader of Iran and demanding “unconditional surrender” from Iran.
But what does that mean for gas prices?
Where Gas Stands
According to GasBuddy’s weekly report, released on Monday, the average gas price in the U.S. rose last week for the first time since May, reaching $3.08 per gallon. The national average, however, is down 9.5 cents from a month earlier and 32.7 cents per gallon from a year ago.
“With Israel and Iran trading attacks, oil prices have surged to multi-month highs — setting the stage for additional price hikes at gas pumps across the country,” Patrick De Haan, head of petroleum analysis at GasBuddy, said in the blog post.
“As long as tensions in the Middle East continue to escalate, the risk of further impacts on oil prices remains high. For now, I expect gas prices could rise by 10 to 20 cents, while diesel could climb 15 to 25 cents in the coming days,” De Haan added.
Oil prices, and subsequently gasoline prices, tend to rise whenever there is a disruption to oil supply somewhere in the world. This tends to happen in the Middle East, most notably as a result of the OPEC embargo in the 1970s, but also happened shortly after the Russian invasion of Ukraine in 2022, when sanctions were placed on Russian oil.
Supply disruptions that affect oil prices also sometimes take place due to weather disasters and other special events.
The GasBuddy report also quoted an analyst about what the tension in the Middle East has done to the price of oil.
“The oil market has reacted strongly to the Israel-Iran conflict; so far, however, no supply has been disrupted, but just a risk premium added due to supply disruption concerns. Risk premia tend to fade if there are no disruptions,” Giovanni Staunovo, UBS commodities analyst, told GasBuddy.
Oil prices had dropped earlier in the week, on reports that a ceasefire was on the way.
Why Gas Prices Are Affected
The Guardian this week looked at the broader question of why oil prices would be affected by the conflict in the Middle East.
“For now, oil prices have cooled to about $72 a barrel and remain well below the peak of $115 a barrel following the invasion of Ukraine by Russia, which is one of the world’s biggest oil and gas exporters,” the analysis said.
“But banks and market forecasters have warned that the trajectory of oil prices will depend on how far the unfolding military and humanitarian crisis between Israel and Iran escalates.”
The nightmare scenario for gas prices would be if Iran shut the Strait of Hormuz, at the edge of the Persian Gulf, therefore cutting off oil exports from the Middle East in general. This would represent a supply constraint and, therefore, likely send oil and gasoline prices soaring.
However, any type of quick resolution to the crisis would likely prevent any such scenario.
Per The Guardian, “fears that the strait could be shut due to regional tensions are well-rehearsed within the global energy industry. Iran has threatened to close the strait in retaliation in the past so although this remains an unlikely scenario, it is a key focus for oil market traders.”
“Geopolitical price spikes pose a bigger risk of recession than inflation in my view,” Bob McNally of Rapidan Energy, a veteran of the Bush-era National Security Council, told Politico this week. “The White House should be worried.”
About the Author:
Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
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doyle-A
June 19, 2025 at 1:10 am
Trump will send the global economy into a tailspin if the US DoD attacks iran.
It will not be a walk in the park as the US will have to vastly increase its imports while other countries may reduce vital exports to US.
Also, there are likely to be heard loud calls to boycott the 2028 olympics.
Trump must not emulate george bush. Although the target is yet another moslem nation. This is because there is an ongoing slaughter taking place in the backgroud.
The daily slaughter of gaza civilians by the IDF. Big massive relentless slaughter by netanyahu who now has trump eating from his right hand.
Ww3 coming. It’s coming.
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