US oil prices continue their relentless rise as the Iran war claims more critical oil infrastructure and extends into its third week, with analysts warning of pump prices approaching $3.85 per gallon on Monday. Petroleum analyst Patrick De Haan has noted that while $4 gasoline is not yet a certainty, all the conditions for it exist. Three weeks of conflict have created a supply crisis that is now being felt directly by American consumers.
When the first strikes against Iran were launched on February 28 by the US and Israel, gasoline was below $3 per gallon nationally. Since then, the persistent targeting of oil infrastructure and the blockading of key shipping routes have pushed that average 23% higher to $3.70. The cumulative effect of three weeks of supply disruption has raised questions about how long the American energy market can absorb these shocks.
The US strike on Kharg Island on Friday, targeting the facility central to Iran’s oil export capacity, has added significant new pressure on global supply. Iran’s maintenance of the Strait of Hormuz blockade continues to deny international shipping access to the waterway that normally carries about one-fifth of global oil supply. Brent crude ranged between $103 and $106 per barrel Monday, while US crude was near $94 following a Sunday high of $100.
California continues to be the hardest-hit state, with pump averages above $5 per gallon and Los Angeles stations in some areas pricing above $8. National diesel prices for commercial transport could rise to $5.05 to $5.15 per gallon. The CEOs of Exxon, Conoco, and Chevron have each met with White House officials to communicate serious concerns about supply deterioration and the potential for speculative traders to inflate prices beyond physical supply realities, with Exxon’s Darren Woods being among the most direct.
US equities started the week on a positive note, with the S&P 500 gaining approximately 1% following a brief softening in crude prices. Major oil company stocks have reached all-time highs since the conflict began. The financial chasm between booming energy sector valuations and struggling household budgets continues to widen as the crisis extends into its fourth week.