Gasoline prices sat just shy of $4 per gallon on Tuesday, rising by more than $1 in the last month with most of those gains coming since the outbreak of the Middle East conflict.
The national average at the pump rose above $3.97 per gallon to touch its highest level in nearly four years, according to AAA data.
Oil has swung sharply on Iran war headlines this week, keeping $4 gas a likely near-term reality.
Read more: How oil price shocks ripple through your wallet, from gas to groceries
“For now, we’re likely to be stuck on either side of $4/gal for the rest of the week,” said Tom Kloza, chief energy advisor at Gulf Oil.
Oil prices are almost 40% higher than when the Iran war started. Coupled with higher-priced summer fuel blends, they are also putting upward pressure on prices and consumers’ wallets.
Diesel has gone up even more over the past month, touching $5.28 per gallon on Tuesday, up more than 40% from a month ago.
On Wednesday, West Texas Intermediate (CL=F) crude futures dropped below $87 per barrel while global benchmark Brent (BZ=F) fell to roughly $95 per barrel after a report that the US sent Iran a 15-point peace plan.
President Trump has suggested the US is negotiating with Iran after postponing attacks on the country’s power infrastructure. The Pentagon is also reportedly sending 3,000 troops from the Army’s elite 82nd Airborne Division as it weighs options on reopening the Strait of Hormuz, a critical oil transit chokepoint where flows have slowed to a near standstill.
Strategists warn prices could climb further if the conflict drags on.
Goldman Sachs analysts raised their Brent forecast for April from $85 to $115, “as a longer disruption supports the risk premium for longer,” given the uncertainty surrounding the Strait of Hormuz.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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