Iran’s refusal to reopen the Strait of Hormuz shipping lanes is keeping US oil prices elevated as the conflict enters its third week, with fresh price increases expected Monday. Petroleum analyst Patrick De Haan has projected pump prices of $3.80 to $3.85 per gallon, while $4 gasoline remains a realistic near-term scenario. The strategic blockade has become the single most disruptive element of the conflict for global energy markets.
The crisis was triggered on February 28 when US and Israeli forces launched the first round of strikes against Iran, setting off an immediate and sustained rise in global oil prices. From below $3 per gallon before hostilities began, the national average has climbed 23% to $3.70, driven by the combination of infrastructure strikes and the Hormuz blockade. Consumer groups have called on the federal government to take action to ease the burden of rising fuel costs on American households.
Friday’s US strike on Kharg Island, Iran’s most important oil processing and export facility, compounded the supply disruption already created by the Hormuz blockade. The combined effect of the infrastructure strike and the shipping lane closure has removed a substantial volume of petroleum from global markets. Brent crude fluctuated between $103 and $106 per barrel Monday, while US crude settled around $94 following a brief spike to $100 on Sunday.
California continues to experience the most extreme domestic price pressures, with average pump prices above $5 per gallon and some Los Angeles stations charging over $8. Commercial diesel users in the trucking and logistics industries face potential costs of $5.15 per gallon nationwide. The heads of Exxon, Conoco, and Chevron have all briefed White House officials on supply risks, with Exxon CEO Darren Woods specifically warning that speculative trading could inflate prices well beyond what supply conditions alone would warrant.
Wall Street opened Monday with mild gains as crude prices softened temporarily, the S&P 500 rising about 1%. Oil company stocks have reached all-time highs since the conflict began, benefiting directly from the elevated price environment. The key to restoring stability to US oil prices lies in persuading Iran to reopen the Strait of Hormuz, a development that appears unlikely in the near term given the ongoing military conflict.