US government war on Iran to drive fuel prices higher, analysts warn

The military conflict between the US, Israel, and Iran that began on February 28, 2026, has done exactly what energy analysts feared it would: send fuel prices into orbit. Gasoline has surged more than 50% from its pre-war average of about $2.98 per gallon, while diesel has climbed over 60% year-over-year to record territory near $6.27 per gallon. According to estimates from Brown University, American consumers have collectively spent more than $100 billion extra on gasoline and diesel from the outbreak of hostilities through September 2026. That works out to roughly $780 per household. The Strait of Hormuz problem The Strait of Hormuz, a chokepoint between Iran and the Arabian Peninsula, handles about 20% of the world’s oil supply on any given day. When military operations disrupted transit through that corridor, the math got ugly quickly. At peak disruption, an estimated 11 to 14 million barrels per day were effectively removed from global markets. For context, the entire US consumes roughly 20 million barrels per day. Reduced Middle Eastern crude availability forced refiners to scramble for alternative sources at higher prices. Refining operations shifted to prioritize diesel an...