Gas/Oil prices

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Gas prices

As the war in Iran fuels instability in oil markets, the impact is hitting drivers fast: The national average gas price has surged to $4.45 a gallon, according to AAA. That's $1.28 higher than this time a year ago — or up nearly 50% since the war began in February. Read more. ps:Up to 4:599 here! It wasn't even a week ago they had gone down into the 3:90s

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Gasoline costs 50% more in the US than before the Iran war The price of a gallon of regular gasoline climbed 31 cents in the past week, spiking to an average of $4.48 per gallon Tuesday, according to AAA. Read more.

Why this matters: Many drivers were hopeful in mid-April in response to signs that the conflict could be winding down. Gasoline prices fell daily for almost two weeks. But as the war continued, the change reversed and prices began increasing again. The longer the flow of oil is constrained through the Strait of Hormuz, the higher prices will go, said Rob Smith, director of global fuel retail at S&P Global Energy.

RELATED COVERAGE ➤ US, Gulf allies threaten Iran with sanctions in UN proposal if it doesn’t release Hormuz chokehold

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⛽ Gas above $4 in 49 states

Data: AAA. Chart: Noah Bressner/Axios The average price of a gallon of regular gasoline — $4.56 this morning — is up more than 50% since the Iran war began, according to AAA data. Prices are above $4 in every state except Oklahoma ($3.99). D.C. is $4.61. 👀 What we're watching: Consumers have a long road ahead before prices return to the good old days of early 2026 — even if a U.S.–Iran deal is reached soon, Axios' Ben Geman writes. GasBuddy's Patrick De Haan tells us some price relief would come within days of the Strait of Hormuz truly reopening. It would then take until early- to mid-2027 for prices to return to prewar levels. Keep reading.

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😳 Getaway Day gas prices

Data: U.S. Energy Information Administration. Chart: Axios Visuals. Chart: Josephine Walker/Axios A record number of Americans will hit the road over Memorial Day weekend — and they'll pay an average of $1.34 more per gallon at the pump compared to a year ago, Axios' Josephine Walker writes. Why it matters: Holiday car trips remain popular, even as the war with Iran pushes gas prices sharply higher. By the numbers: The national average will be $4.48/gallon on Memorial Day, up from $3.14 last year, GasBuddy says. An estimated 45 million Americans will travel at least 50 miles over the holiday period. That's up from 44.8 million in 2025 and 42.8 million in 2019.

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⛽️ Signs of gas relief

Data: AAA; Chart: Ben Geman/Axios Pain at the pump is easing, with the U.S. average price for regular gas at $4.39 per gallon this morning, per AAA — down 16¢ over last week as the U.S. and Iran closed in on a possible deal to extend the ceasefire, Axios' Ben Geman writes. Prices are seeing their largest weekly drop of the year, Patrick De Haan, head of petroleum analysis at the fuel data and analysis firm GasBuddy, posted on X. 🥊 Reality check: Gas is still far above the roughly $3 that Americans were paying right before the war started. Don't expect a quick return to pre-war prices or anything close for the foreseeable future — and prices could rise again. Even if a U.S.-Iran deal becomes official, it's not clear whether tanker owners will feel confident enough to transit the Strait of Hormuz in large numbers anytime soon.

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Maybe we don't need all this oil

Illustration: Aïda Amer/Axios Analysts are starting to wonder if the world needs less oil than what's commonly believed, Axios' Emily Peck reports. Retail prices for gas and diesel are both up around 30% globally year over year amid the Iran war, Goldman Sachs analysts said in a recent note. As a result, demand is dropping fast for gas, diesel, jet fuel and petrochemicals. 📉 Economists expected that "demand destruction" to trigger a big economic slowdown. But it hasn't — at least not yet. That's partly because consumers have new ways to shift away from oil. 🚙 For example: People are switching to electric vehicles in Europe and (especially) China. That's less true in the U.S., after the Trump administration stopped pushing EVs and renewables. 🇨🇳 JPMorgan analysts wrote in a research note last week: "We spent last week in China, and the most striking takeaway ... was not simply that oil demand has fallen. It was that it may have dropped by as much as 9% ... abruptly, unexpectedly and with remarkably little visible disruption." ⛽️ Between the lines: Today's energy system was built after the 1973 oil crisis, which convinced countries and businesses to improve fuel efficiency. Today's crisis could spark an even more radical shift, with the Iran war leading to "the steady decoupling of economic activity from oil consumption itself," the JPMorgan analysts wrote. Go deeper.

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⛽ Sticky gas prices

Data: U.S. Energy Information Administration. Chart: Erin Davis/Axios Visuals Even with the makings of a deal to end the Iran war, gas and airfare will take longer to return to pre-war levels — if they ever do, Axios' Alex Fitzpatrick and Erin Davis report. Why it matters: Oil prices can rise quickly and dramatically when headline-grabbing events like war or hurricanes threaten global supplies. It usually takes longer for them to settle back down. 📉 Reality check: U.S. gas prices have been dropping, but they're still way above prewar levels. This morning's nationwide average price per gallon of regular is $3.88. It was $3.22 a year ago. ⚖️ On Truth Social this week, President Trump ordered the Justice Department to look into customers being "gouged."