Delaware drivers are feeling the pain at the pump as gasoline prices have surged dramatically due to the ongoing conflict with Iran. According to AAA, the average cost for a gallon of regular gasoline reached $4.54 on Wednesday, representing a sharp 31-cent increase over just seven days.
This current price point marks a staggering 52% increase compared to what Americans were paying before hostilities with Iran commenced. The primary culprit behind these escalating fuel costs is Iran’s effective blockade of the Strait of Hormuz, a critical maritime corridor that typically handles one-fifth of global crude oil shipments.
The strategic waterway off Iran’s coastline has become a chokepoint for oil tankers, creating significant supply constraints that have driven crude oil prices higher over the past two months. Since crude oil serves as gasoline’s primary component, these increases directly impact what consumers pay at gas stations.
There was a brief period of relief in mid-April when fuel prices dropped consistently for nearly two weeks as diplomatic efforts suggested the conflict might be de-escalating.
“After the announcement of the initial ceasefire, there was kind of optimism that this really could be the beginning of the end of the conflict,” explained Rob Smith, who serves as director of global fuel retail at S&P Global Energy. “And so crude prices came down correspondingly, gasoline spot prices followed, and so on … the retailers lowered prices as well.”
However, that optimistic trend reversed course as tensions escalated once again around the strait, keeping oil supplies severely limited and prices climbing.
“There’s a fundamental shortfall that will exist globally or fundamental struggle to meet that demand that will drive up price,” Smith noted. “No matter what a government says or what any market person thinks, there is a true kind of upward pressure that’s being exerted on prices every day the Strait of Hormuz is constrained. And it is still severely constrained.”
While individual gas station operators determine their pricing, multiple factors influence their decisions. According to the Energy Information Administration, crude oil costs account for approximately 51% of gasoline’s price in the United States during 2025.
This direct correlation means that when oil becomes more expensive, gasoline prices typically follow suit. Reduced oil availability in global markets creates upward pressure on both commodities.
The International Energy Agency has characterized Iran’s closure of the Strait of Hormuz as the most significant supply disruption in oil market history. This crisis pushed crude oil prices to peak at $112 per barrel during early April.
Recent diplomatic developments showed some promise, with oil prices dropping below $100 per barrel Wednesday as the United States and Iran appeared to make progress toward a preliminary agreement to end hostilities. If this trend continues, gasoline prices could potentially decline as well.
Bob Kleinberg, an adjunct senior research scholar at Columbia University’s Center on Global Energy Policy, analyzed the relationship between gasoline prices and WTI crude oil benchmarks over recent weeks, finding their movements closely aligned.
“Not much of a mystery here,” Kleinberg observed. “It’s not exactly proportional but the shape of the curves follows the same pattern, and really with very little delay.”
Beyond crude oil costs, federal and state taxes represent about 17% of gasoline’s price, while refining expenses and profits contribute 14%, and distribution plus marketing add another 17%, according to EIA data. States like California experience even higher prices due to increased taxes and refining costs.
A significant escalation occurred in April when the United States imposed blockades on Iranian ports to prevent the country’s oil exports.
“Iran had been moving an unusually high amount of oil to global markets, so that was helping moderate prices,” said Jim Krane, an energy research fellow at Rice University’s Baker Institute. “The Trump administration decides they’re going to punish Iran, and try to put more pressure on Iran by blocking their exports, so of course that does put pressure on Iran, but also puts pressure on global oil prices and forces them up. That was probably a big factor.”
Oil markets demonstrate extreme sensitivity to breaking news about Persian Gulf shipping attacks or stalled diplomatic negotiations. “The oil market is exquisitely sensitive to what’s coming out of the White House,” Kleinberg emphasized.
When the Iran conflict first erupted in early March, gasoline prices jumped 48 cents within a single week. For comparison, the largest weekly increase occurred in March 2022, when prices rose 60 cents following Russia’s invasion of Ukraine, according to AAA data.
Predicting future gasoline price peaks remains impossible. Current prices exceed those from early May 2022, and during that period, costs continued climbing through Memorial Day weekend, AAA reported.
Smith warned that prolonged disruptions to Strait of Hormuz oil flows will result in higher prices and extended recovery periods.
“Even if there was a true and lasting resolution of the conflict, both sides agree to play nice and truly do commit to keeping Hormuz open, it will still take months to get back to what it was pre-war, if not even longer,” Smith explained. “There will still be within the industry a risk premium associated with going through that region. Not that it was ever a perfectly safe journey, but the past few months have shown that it’ll be hard to convince shippers and insurance companies that the risk level will be similar to what it was in February. It’ll be a long time before anyone can be convinced of that.”
