Since the U.S. and Israel escalated their conflict with Iran in late February, Americans have incurred nearly $45 billion in extra fuel expenses, as researchers have noted. As Memorial Day weekend approaches, drivers are facing gasoline prices nearing $5 per gallon.
According to the Brown University tracker, the additional financial burden for consumers reached approximately $44.9 billion by Friday. This surge in costs stems from climbing gasoline and diesel prices, primarily driven by disruptions in global oil supplies and the blockade of the Strait of Hormuz.
On the same day, the national average price for regular gasoline hit $4.55 per gallon—an increase of over 50% since the conflict began, marking the highest pre-Memorial Day gas prices since 2022, as reported by CNBC.
Experts are cautioning that things could worsen.
GasBuddy Oil Analyst Patrick de Haan indicated to CNBC that if disruptions in the Strait of Hormuz continue, we might see prices go beyond $5 a gallon in June.
The rising fuel prices are among the most visible economic impacts emerging from the escalating tensions in the Middle East.
The Iran War Energy Cost Tracker from Brown University reports that Americans have spent about $24.97 billion more on gasoline since the conflict began, with diesel contributing an additional $19.85 billion to the increased expenditure.
This pricing frenzy largely results from interruptions along the Strait of Hormuz, a crucial route for global crude oil shipments prior to the outbreak of violence.
The Iranian blockade, paired with various attacks on energy infrastructure in the area, has unsettled global markets, leading oil prices to rise more than 40% compared to levels before the war.
As oil prices soared, American consumers quickly felt the squeeze when refueling their vehicles.
This week, gasoline prices across the nation spiked to levels not seen since July 2022, though they dipped slightly after President Trump suggested potential diplomatic progress with Tehran.
However, market players and energy analysts are doubtful about any immediate breakthroughs.
“The president has indicated that some progress is being made, but it’s hard to say how reliable that is,” De Haan expressed to CNBC.
The Trump administration’s response to the disruptions caused by the conflict includes collaborating with the International Energy Agency to release 400 million barrels of oil and refined products, which features 172 million barrels from U.S. reserves.
“President Trump and his energy team were proactive in anticipating market disruptions, making sure to communicate these concerns to the American public, and setting in motion concrete plans to alleviate the impact,” noted White House Press Secretary Taylor Rogers in a statement.
“President Trump will not let Iran acquire a nuclear weapon and will keep advancing America’s vital national security interests. If the president succeeds in resolving this conflict, we can expect gasoline prices to return to lower levels, promoting more stability in global energy markets over time.”
Furthermore, diesel prices are climbing even more sharply than gasoline costs, with some experts warning they could reach $6 or even $7 a gallon as Europe and Asia try to replace lost fuel supplies from the Middle East with U.S. exports.
Unlike gasoline, which is more consumer-focused, sectors like trucking, shipping, and industries rely heavily on diesel, resulting in broader economic impacts from rising prices.
“I think the $44 billion figure might actually underestimate the true impact, as consumers feel this strain in ways that extend beyond just the gas station,” stated Scott Martin, a partner at Kingsview Wealth Management. “As diesel and fuel prices rise rapidly, transportation costs also increase, affecting nearly every aspect of moving products through the economy—including grocery prices, retail, airfare, and shipping.”
Martin emphasized that many households are already feeling the pressure, as they’ve been grappling with debt and ongoing inflation.
“A lot of families are racking up credit card debt, facing higher mortgage and car loan payments, alongside the effects of persistent inflation,” he explained.
“If fuel prices stay elevated for an extended period, there’s a real risk that this will start to influence consumer behavior more broadly.”
“People might reduce discretionary spending, cut back on travel, or delay shopping. At that point, we could see a more significant impact on overall economic growth.”
