U.S. gas prices top $4 as war with Iran raises oil and diesel costs

  • U.S. gas prices exceeded $4 per gallon on March 31, AAA reported.
  • Diesel prices rose faster than regular gasoline amid prewar supply shortages.
  • Strait of Hormuz carries one-fifth of global oil supply between two waterways.

The war with Iran has driven up oil and gas prices, increasing costs for U.S. motorists, food delivery drivers, farmers and the U.S. Postal Service. Average U.S. gasoline prices topped $4 per gallon on March 31 for the first time since 2022, according to AAA. Analysts say prices are likely to stay elevated until shipping resumes through the Strait of Hormuz (key oil-shipping waterway), which links the Persian Gulf and Gulf of Oman and carries one-fifth of the world’s oil supply. California generally has higher prices because it relies heavily on imported oil and imposes higher gasoline taxes, although prices have risen nationwide. Diesel, the fuel used by trucks, boats and trains to move goods, has increased faster than regular gasoline, partly because supplies were already tight before the war. Oil represents about half the cost of a U.S. gallon of gasoline, with refining, taxes and marketing making up the remainder, according to the U.S. Energy Information Administration. Seasonal demand also affects prices, with fuel consumption rising during warmer months.

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