Gas prices top $4 a gallon as Iran war escalates
Gas prices in the United States topped $4 per gallon on average Monday as an escalation of the Iran war renewed fears of a global oil shortage.
Prices at the pump have jumped 13 cents per gallon, or 3%, over the past week, AAA data showed, with the average price per gallon now at $4.003.
The recent cost rise brings gasoline prices back to a level achieved soon after the Iran war began in late February. The Middle East conflict prompted Iranian closure of the Strait of Hormuz, the maritime trading route that facilitates transportation of about one-fifth of global oil supply. The historic oil disruption sent gasoline prices surging.
Gas prices temporarily fell below $4 a gallon last month after the U.S. and Iran struck a preliminary agreement aimed at ending the war. Before the Iran war, fuel costs had last exceeded $4 a gallon in August 2022 following the Russian invasion of Ukraine.
An exchange of strikes between the U.S. and Iran in recent days has reignited large-scale fighting and dampened prospects of a resolution.
President Donald Trump on Sunday said the U.S. hit Iran "hard" in honor of the U.S. service members who were killed by Iran over the weekend.
U.S. Central Command said two service members were killed in an attack on Jordan on Friday, and that a third service member remained missing. Another service member was killed in Iraq on Saturday, CENTCOM said.
The U.S. resumed its naval blockade of the Strait of Hormuz last week, reversing a key commitment made as part of the agreement. That move came after Iran fired upon oil tankers in the strait.
The Iran war triggered one of the largest oil shocks ever recorded, sending the national average price of gasoline as high as $4.56 a gallon on May 21, AAA data showed.
Oil and gasoline prices began to fall in late May, however, as Iran and the U.S. appeared willing to strike an agreement that would reopen the strait. By late June, those prices gad fallen fell to their lowest level since before the war began.
Relief at the pump helped bring down prices overall. Inflation dropped more than expected in June as gas prices eased, federal government data on Tuesday showed.
Gas prices rose 3.5% in June compared to a year earlier, marking a retreat from a year-over-year inflation rate of 4.2% in the prior month. The reading for June marked the lowest inflation since March, though the pace of price increases remains more than a percentage point higher than its pre-war level.
Even after easing last month, overall inflation stands markedly higher than the Federal Reserve's target rate of 2%.
ABC News' David Brennan contributed to this report.
