Iran attack could drive up gas prices within days, some analysts say

Oil prices surged on Monday after the U.S.-Israeli attack on Iran, threatening to push up gasoline prices within days, industry analysts told ABC News.

The spike in oil prices comes amid fears of a prolonged disruption of the Strait of Hormuz, a trading route that facilitates the transport of about one-fifth of global oil supply. Iran asserts control over the passage of tankers through the strait.

Brent crude prices climbed more than 6% on Monday, registering at about $77 per barrel. Those gains came on top of a roughly 5% increase in February as U.S.-Iran tensions grew. The current price marks the highest level since last June, but it stands well below a three-year high of $94 a barrel.

Oil prices could soar above $100 over the coming days or weeks if the Iran war continues, analysts said, potentially rising even higher if any destruction of oil infrastructure or transit routes appears long-lasting.

“There’s huge room for prices to go up,” Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston, told ABC News.

The price of crude oil has major implications for the economy and consumers; its price can affect products ranging from gasoline to plastics.

The average price of a gallon of gas is currently $2.94, marking a nearly 2% increase from a week earlier, Patrick De Haan, the head of petroleum analysis at GasBuddy, said in a blog post on Monday.

The current oil-price increase may combine with a seasonal price hike for gasoline set to take effect within weeks, since demand for gas typically grows as travel picks up in the warmer spring weather, De Haan added.

“In the week ahead, gasoline prices are likely to face heightened upward pressure as seasonal trends continue and markets navigate this evolving geopolitical landscape, with the national average poised to reach the $3-per-gallon mark for the first time this year,” De Haan said.

The jump in oil prices over recent days stems from an anticipated supply shortage as markets brace for a potential long-term closure of the Strait of Hormuz, some analysts said.

The passage marks the only shipping route that stretches from the Persian Gulf to the open ocean, making it a key travel hub for goods originating in oil-rich Gulf countries like Saudi Arabia, Qatar and Iran. At its narrowest point, the Strait of Hormuz is just 21 miles wide.

In 2024, an average of about 20 million barrels per day passed through the Strait of Hormuz, which amounts to roughly 20% of liquid petroleum consumed worldwide, according to the U.S. Energy Information Administration, a federal agency.

“The Strait of Hormuz is the single most important global oil transit chokepoint,” Timothy Fitzgerald, a professor of business economics at the University of Tennessee who studies the petroleum industry, told ABC News.

The vast majority of oil that passes through the strait is bound for Asian markets. Nearly 5 million barrels of oil arrived in China via the Strait of Hormuz each day in 2024, the EIA said, while about 2 million barrels of such oil ended up in India on a daily basis.

Closure of the strait would push up prices worldwide, however, since oil is sold on the global market.

“Since oil is traded globally, we’re likely to see price spikes, even in the U.S.,” Krishnamoorti said.

Analysts differed over the extent of potential price increases. Krishnamoorti said the price of a barrel of oil could rise as high as $100 this week. The price could hit $150, he added, if the war lasts “until the end of the month.”

Fitzgerald said prices could ultimately rise above $100 in a “worst-case scenario.” Tucker Balch, a finance professor at Emory University, also said it could rise above $100 per barrel in the event of a “protracted war,” though a more modest conflict may put the price around $80 per barrel.

In March of 2022, the price of Brent crude surged above $139 per barrel just weeks after the Russian invasion of Ukraine. The average price of a U.S. gallon of gasoline stood at about $4.32 at that time, according to data from the EIA.

A resolution of the Iran war could offer price relief, but it may depend on the extent of long-lasting infrastructure damage, Balch said.

“If it’s resolved quickly, before that infrastructure is destroyed, I’d expect the price come back down fairly quickly,” Balch added.