American motorists are facing gasoline costs not seen in nearly four years, with the national average reaching $4.18 per gallon following escalating tensions in the Middle East, according to American Automobile Association data released Tuesday.
The price jump represents a sharp 7-cent increase in a single day – the steepest daily climb in over a month. Since late February, when U.S. and Israeli forces launched attacks against Iran, fuel costs have surged by $1.19 per gallon, marking more than a 40% increase.
Drivers nationwide are experiencing significant financial strain as energy expenses climb amid Middle Eastern warfare that has severely restricted shipping through the Strait of Hormuz. This crucial maritime passage handles approximately one-fifth of global oil and gas transportation.
“There has been no progress there at all and crude oil prices are increasing because of it,” said Rystad Energy analyst Susan Bell.
Industry experts warn that gasoline costs may continue climbing if crude oil prices maintain their upward trajectory. Recent energy price spikes have particularly squeezed profit margins for fuel retailers across the nation.
Tom Kloza, chief energy advisor to Gulf Oil, explained that retail fuel margins have faced severe compression. While retailers traditionally maintain margins around 40 cents per gallon over the past five years, those margins have shrunk by approximately 30 cents as of last week.
“We had an abnormal situation where a lot of the recent increases in April never made it to the street,” Kloza noted. “The retailers have essentially been taking one for the team.” He emphasized that retail prices must increase or individual gas station operators will face losses on motor fuel sales.
Oil markets showed dramatic gains last week, with Brent crude futures jumping roughly 16% and U.S. West Texas Intermediate climbing nearly 13% as supply concerns intensified due to stalled peace negotiations regarding the Iran conflict. Earlier this month, oil prices had temporarily stabilized on hopes the Strait of Hormuz might reopen.
Refinery complications have compounded the supply shortage, particularly affecting the U.S. Midwest region, according to GasBuddy analyst Patrick De Haan. He predicted that Great Lakes area retailers might implement additional price increases as early as today.
Several major refineries are currently experiencing operational challenges. Phillips 66’s Wood River facility in Illinois, which processes 356,000 barrels daily, shut down its crude oil unit and additional sections in late February for a 45-day maintenance program.
Marathon Petroleum’s Robinson refinery in Illinois, handling 253,000 barrels per day, entered scheduled maintenance in mid-March with units expected to remain offline through mid-May.
Additionally, BP’s massive Whiting, Indiana refinery experienced a weekend power failure that forced the shutdown of one processing unit. The facility typically processes 440,000 barrels daily.
Rystad Energy data indicates that April has seen approximately 150,000 barrels per day of unexpected outages nationwide, combined with roughly 670,000 barrels daily of planned maintenance shutdowns.
