US Oil Prices Likely to Stay High as Iran Conflict Blocks Key Oil Routes

Iran’s blockade of the world’s most critical oil shipping lane is keeping US oil prices elevated, with analysts projecting continued high pump prices as the conflict enters its third week. Patrick De Haan has placed his Monday forecast at $3.80 to $3.85 per gallon for average gasoline, with $4 still within reach. The unresolved military standoff has effectively removed a significant portion of the global oil supply from markets indefinitely.
The price crisis dates to February 28, when US and Israeli forces launched strikes on Iran, a move that immediately sent global oil prices climbing. From below $3 per gallon before the conflict, the national gasoline average has risen 23% to $3.70. The speed and magnitude of the increase has left many American consumers struggling to adjust their transportation budgets.
The US bombing of Kharg Island on Friday, one of Iran’s most valuable oil processing facilities, further eroded already constrained global oil supply. Iran’s blockade of the Strait of Hormuz—which carries approximately 20% of the world’s daily oil—continues to deny international shipping lanes to tankers. Brent crude traded between $103 and $106 per barrel Monday, while US crude moved near $94 after briefly reaching $100 on Sunday.
In California, the price crisis has been particularly acute, with state averages above $5 per gallon and certain Los Angeles stations charging over $8. Diesel, which powers most of the country’s freight transport, could hit $5.15 per gallon nationally. White House officials have received direct warnings from Exxon CEO Darren Woods about the escalating supply crisis and the risk that market speculators could drive prices still higher, with Conoco and Chevron executives voicing similar concerns.
US stock markets began Monday with modest gains, as the S&P 500 rose approximately 1% following a brief oil price dip. Oil sector stocks have soared to all-time highs since the conflict began, benefiting directly from the elevated price environment. For consumers, however, the crisis continues to represent a significant and growing economic burden, with no clear resolution visible on the horizon.