US oil prices are carrying the heavy economic burden of the Iran war into a third week, with pump prices approaching $3.85 per gallon and the $4 mark still a realistic possibility. Analyst Patrick De Haan has placed his Monday forecast at $3.80 to $3.85 per gallon, reflecting the sustained supply pressure created by three weeks of military operations. The burden of the conflict on global energy markets shows no signs of lightening in the near term.
The burden began to accumulate on February 28, when the US-Israel campaign against Iran commenced and immediately disrupted global oil supply chains. From below $3 per gallon before the conflict, the national average has risen 23% to $3.70, a steady accumulation of price pressure driven by the progressive targeting of oil infrastructure and the closure of key shipping lanes. The cumulative burden of three weeks of conflict has created one of the most sustained energy price shocks in recent US history.
Friday’s US strike on Kharg Island, targeting the facility at the heart of Iran’s oil export capacity, added to the burden on global energy supply at a time when markets were already operating under significant strain. Iran’s blockade of the Strait of Hormuz has denied international markets access to roughly one-fifth of global daily oil supply. Brent crude oscillated between $103 and $106 per barrel Monday, while US crude held near $94 after briefly reaching $100 the previous day.
California is bearing the heaviest domestic burden from the oil price crisis, with state averages above $5 per gallon and some Los Angeles stations posting prices above $8. Diesel for commercial freight could reach $5.15 per gallon nationally. Oil company executives including Exxon’s Darren Woods and counterparts at Conoco and Chevron have each briefed White House officials on the escalating supply situation, with Woods specifically warning about the danger of speculative trading amplifying the price burden on consumers.
Wall Street gained modestly Monday, the S&P 500 rising about 1% following a brief retreat in crude prices. Major oil company shares have reached all-time highs since the conflict began. The burden of the Iran war on US oil prices will continue to grow until a diplomatic or military resolution brings the conflict to a close and allows global energy supply to normalize.