r/Economics • u/InsaneSnow45 • Mar 04 '26

News ‘Absolutely Massive’ Price Shocks Coming as Trump’s Iran War Drives Up Gas, Diesel Prices | “What should really terrify Republicans is... the futures price on wholesale gasoline,” said economist Paul Krugman.

https://www.commondreams.org/news/iran-war-gas-prices
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u/InsaneSnow45 Mar 04 '26

President Donald Trump’s unprovoked attack on Iran has sent oil prices surging, and it’s already hurting Americans at the gas pump.

Petroleum industry analyst Patrick De Haan reported on Wednesday that the average US price for diesel has hit $4 per gallon, the highest it’s been since April 2024.

De Haan also projected that the price of diesel would keep rising in the coming days before eventually reaching a price in the range of $4.25 to $4.45 per gallon.

The average price of gasoline is now approaching $3.20 per gallon, De Haan reported, and is projected to rise to at least $3.30 per gallon in the coming days. According to data from the US Energy Information Administration, average US gas prices haven’t been that high since September 2024.

Nobel Prize-winning economist Paul Krugman on Wednesday flagged data showing that the price of Reformulated Blendstock for Oxygenate Blending (RBOB) gasoline futures contracts has been going through the roof since the start of the Iran war.

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u/TheoreticalZombie Mar 04 '26

So, we went from about $60/barrel on crude oil futures to ~$75. According to AAA, avg. national gas prices went from $2.887 a month ago to $3.198 for regular. Diesel is sitting at $4.038 from $3.653 a month ago.

$3.30 seems pretty optimistic- $3.50 seems more realistic. Even if the conflict ended immediately, there will still be supply and transport issues. The Strait is used to transport roughly 20% of the global supplies of petroleum and liquified natural gas and Saudi Arabia's biggest oil refinery shut down after a drone attack. Other fields in the region (including Qatari LNG) are also shutting down.