Global energy markets remain on high alert as the Iran war drives US oil prices higher into a third week of conflict, with fresh volatility expected Monday. Analyst Patrick De Haan has forecast pump prices of $3.80 to $3.85 per gallon, with $4 gasoline still a near-term possibility. The Iran war has become the dominant force driving global energy prices, and its effects are felt most directly at American gas stations.
The conflict that is driving US oil prices higher began on February 28 when the US and Israel launched the first of multiple waves of strikes against Iran, triggering a sustained rise in global oil prices. From below $3 per gallon before the war, the national average has climbed 23% to $3.70, driven by systematic supply disruptions caused by the ongoing military campaign. The magnitude and pace of the increase have placed it among the most significant energy price escalations in recent US history.
Friday’s US attack on Kharg Island, which targeted the nerve center of Iran’s oil export operation, has kept global energy markets in a state of high alert. Iran’s blockade of the Strait of Hormuz, through which roughly one-fifth of global oil supply flows, continues to restrict access to a vital international shipping corridor. Brent crude traded between $103 and $106 per barrel Monday, while US crude fluctuated near $94 following a brief spike to $100 the previous day.
California remains the focal point of domestic consumer hardship, with average pump prices above $5 per gallon and some Los Angeles stations posting prices of over $8. Diesel for commercial transport could reach $5.15 per gallon across the country. The CEOs of Exxon, Conoco, and Chevron have each briefed White House officials on supply disruption risks, with Exxon’s Darren Woods specifically highlighting the danger of speculative traders driving prices beyond what physical shortages would warrant.
Wall Street opened with modest gains Monday, with the S&P 500 rising about 1% following a brief oil price retreat. Oil company stocks have climbed to record highs since the conflict began, reflecting investor confidence in continued elevated prices. Global energy markets will remain on high alert, and US oil prices will remain elevated, until a diplomatic or military resolution to the Iran conflict is achieved.