US oil prices are at risk of another sharp spike on Monday as the third week of the Iran conflict continues to destabilize global energy supply chains. Analyst Patrick De Haan has forecast that average American pump prices could reach $3.85 per gallon, with $4 fuel still a plausible near-term scenario. Three weeks of military escalation have pushed the US energy market into territory rarely seen outside of major global crises.
The current oil crisis originated on February 28 when the US and Israel initiated strikes on Iran, a move that immediately reverberated through global energy markets. In fewer than three weeks, the national average cost of regular gasoline has jumped 23%, climbing from below $3 to $3.70 per gallon. The sustained price increase has added hundreds of dollars per year to the average American household’s fuel budget.
The strike on Iran’s Kharg Island by US forces on Friday added significant new pressure to an already disrupted supply chain. At the same time, Iran’s blockade of the Strait of Hormuz has locked roughly 20% of the world’s oil supply out of global markets. Brent crude reached $106 per barrel in early Monday trading before declining to $103, while US crude fell to $94 after briefly reaching $100 on Sunday.
California continues to be the most severely impacted state, with average pump prices above $5 per gallon and some Los Angeles stations charging over $8. Diesel costs for commercial trucking and rail could rise to between $5.05 and $5.15 per gallon nationally. The CEOs of Exxon, Conoco, and Chevron have each engaged with White House officials to convey mounting concerns about supply availability and the potential for speculative trading to further inflate prices.
Wall Street registered modest gains on Monday as oil prices temporarily retreated, with the S&P 500 climbing about 1% in early trading. Major oil producer stocks have reached all-time highs since the conflict began, as energy sector investors benefit from elevated prices. For American consumers, however, the crisis continues to represent a growing economic burden with no clear end in sight.