U.S. gasoline prices may climb toward $4 a gallon as Strait of Hormuz disruption lifts oil

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U.S. gasoline prices may rise

Highlights

U.S. national average gasoline price rose to $3.84 per gallon, up 9.8 cents from a week ago and 22.2% year-on-year, per GasBuddy data.
Tanker transits through the Strait of Hormuz dropped to a two-month low amid renewed U.S.-Iran hostilities, pushing oil and fuel prices higher.
Analysts warn U.S. gasoline could hit $4 per gallon within 7–10 days, fueling inflation risks and impacting consumer budgets ahead of November elections.

Fuel price outlook and supply disruption

As reported by Reuters, the national average gasoline price stands at $3.84 a gallon on Tuesday, up about 9.8 cents from a week ago, according to data from fuel price tracker GasBuddy. Gasoline prices are also up 22.2% from a year earlier, while analysts now warn the national average could reach $4 a gallon within the next 7 to 10 days if current market conditions persist.

The latest pressure on prices follows renewed hostilities between the U.S. and Iran, which have disrupted tanker traffic through the Strait of Hormuz, a key artery for global oil supplies. Shipping data showed on Monday that tanker transits through the strait fell over the past day to the lowest level in two months.

The $4 a gallon threshold was last exceeded in late March after Iran blocked the strait. Prices then eased below that level in June after the U.S. and Iran signed a memorandum of understanding to end the war, but the collapse of the truce last week and the reimposition of a U.S. naval blockade on Iran have again driven crude and retail fuel prices higher.

Inflation risks and broader economic impact

GasBuddy analyst Patrick De Haan said in a blog post on Monday that the national average gasoline price is likely to reach $4 per gallon in the next 7 to 10 days, if not sooner, while the U.S. average diesel price could return to $5 per gallon by the end of this week. He added that drivers in some states may see prices rise above $4 a gallon even sooner.

Higher gasoline prices could create another challenge for inflation as transportation, freight and logistics costs rise alongside fuel. Simon-Peter Massabni, head of business development at XS.com, said a sustained increase in gasoline prices through July could quickly reverse the narrative of easing price pressures seen in June.

Mark Zandi, chief economist at Moody's Analytics, said in an email that if hostilities intensify and the Strait of Hormuz remains largely closed for several weeks, already low global oil inventories will fall further. In that scenario, he said prices for oil, gasoline and other forms of energy will spike, and physical supply shortages will emerge globally.

Higher fuel prices are also being supported by reduced Russian refining capacity after Ukraine intensifies attacks on energy infrastructure. For U.S. consumers, another move above $4 a gallon would likely deepen pressure on budgets already strained by inflation and add a political challenge ahead of the November midterm elections.

Our earlier coverage of U.S. transportation inflation showed that transportation costs continued to outpace overall inflation in June 2026, driven primarily by a sharp year-over-year increase in gasoline prices. We also noted that airline fares and vehicle maintenance added to price pressures, while auto insurance and used vehicles provided partial offsets, leaving transportation a major contributor to the CPI.

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