Average Gas Price in the U.S. Tops Four Dollars a Gallon for First Time Since 2022

What Happened?

The average price for a gallon of gasoline in the United States passed four dollars this week for the first time since 2022. According to the American Automobile Association (AAA), gas prices have increased since the U.S. and Israel attacked Iran on February 28, rising more than a dollar per gallon over the past month.

The last time gas was above $4 per gallon was in August 2022, when prices briefly rose above $5 per gallon in June of that year following Russia's invasion of Ukraine. The Trump Administration has released some oil from the strategic petroleum reserve, but prices have continued to rise. 

Why it Matters

Increasing fuel costs have a ripple effect on every segment of the economy. Because rising fuel costs make transportation more expensive, companies often have no choice but to raise prices on goods to make up the difference.

Consumers in the U.S. are already seeing a rise in the costs of goods such as groceries due to increasing fuel prices. Oil is over one hundred dollars a barrel as of March 31, 2026, compared to sixty dollars a barrel at the end of March 2025. Nearly all the increase in oil prices has occurred since the beginning of the war with Iran.

OPEC, the Organization of Petroleum Exporting Countries, had pledged to increase production to lower average fuel costs, but instead, they have decreased production due to the war with Iran. Damage to refineries and petroleum infrastructure by Iran, combined with the closure of the Strait of Hormuz, has caused the global oil supply to drop, which in turn caused prices to rise. While the Strait of Hormuz could theoretically be reopened soon, destroyed refineries could take months or even years to rebuild.

Even if the war with Iran ended today, oil prices would likely not return to pre-war levels for several weeks and possibly months. That means the Iran War will likely have a long-term impact on the production, shipment, and consumption of oil worldwide.

If the war in Iran continues, it could lead to an energy crisis on par with the fuel crisis of 1973 and 1974 for the United States. The energy crisis of 1973 and 1974 drove up inflation, increased unemployment, and led to an economic recession for the United States. 

The current surge in energy costs is being caused exclusively by the war with Iran. Iran is using oil as an economic weapon to put pressure on the U.S. and Israel, a strategy the Iranians are likely to continue using for the duration of the war.

How it Affects You

With the approach of summer, which is traditionally a time for many Americans to increase leisure travel, the impact of higher gas prices will likely become more acute. Vacations may have to be cancelled or shortened, and communities that rely on tourism could see a reduction in summer revenue. Political opponents of the Trump Administration could use those events against supporters of President Trump in the 2026 mid-term elections.