Gasoline prices touched their highest level since March 2022 on Wednesday as oil futures surged amid an escalation in Middle East conflict.
The national average at the pump rose above $3.84 per gallon, an increase of $0.25 from a week ago and $0.94 from one month ago, according to AAA data.
At this pace, prices could touch $4 per gallon in the coming weeks.
“I do believe it’s looking like a strong possibility right now,” Patrick De Haan, head of petroleum analysis at GasBuddy, told Yahoo Finance. “I think we’re 90% of seeing it happen.”
Oil prices, which are more than 30% higher than when the Iran war started, coupled with higher-priced summer driving fuel blends, are also putting upward pressure on prices and consumers wallets.
Read more: How oil price shocks ripple through your wallet, from gas to groceries
On Wednesday, President Trump announced a temporary waiver of the Jones Act, which allows non-US ships to deliver goods to other parts of the US.
“This will have a minimal impact on fuel prices, but does help alleviate the supply chain, providing more options to get fuel to US markets,” said De Haan.
Diesel prices have also soared roughly 38% from a month ago, surpassing $5 per gallon to reach a four-year high.
The rise in fuel used for trucks and machinery is particularly concerning, given that roughly 70% of goods are transported through trucking in the US.
“There’s just lots of ways that oil and derivatives of oil get into the production and transportation of many, many things,” said Fed Chair Jerome Powell on Wednesday, suggesting that higher energy prices risk seeping into inflation reads.
The surge in gasoline prices comes as oil rose for a second day in a row on Wednesday after reports that Israel hit and damaged Iran’s major natural gas processing facility in the southwestern part of the country.
The latest escalation of war efforts “is keeping crude in a ‘fast market’ type of trade,” said Dennis Kissler, senior vice president at BOK Financial.
West Texas Intermediate crude oil (CL=F), the US benchmark, rose above $97 per barrel. Futures on international benchmark Brent crude (BZ=F) topped $104.
Despite measures such as petroleum reserve releases, easing of sanctions has done little to calm the energy markets as the Strait of Hormuz, a major oil flow passageway, remains at a near standstill.
Strategists say prices could rise further the longer the war lasts.
RBC Capital Markets estimates that oil could exceed the $128 per barrel high reached after the Russian invasion of Ukraine if the conflict lasts three to four more weeks. If the war extends for several months, prices could surpass the 2008 peak of $146 per barrel, the analysts said.