Gasoline, diesel, and jet fuel prices have jumped sharply as the widening conflict between the US, Israel, and Iran chokes off oil shipments through the Strait of Hormuz. Overnight, the cash price for a gallon of regular gasoline in New York surged 30 cents to $3.29, according to GasBuddy data. Analysts warn prices could climb much higher, potentially reaching $4 a gallon, a level previously considered unlikely. This surge is already impacting consumers and businesses globally.

The world remains heavily reliant on Middle Eastern oil, much of which flows through the narrow strait now effectively closed. The war has also driven up insurance costs for tankers, raising the cost of delivering crude and fuels even when cargoes can be sourced. Jeff Currie, chief strategy officer of energy pathways at Carlyle Group Inc., states the impact on energy markets is likely to be far bigger than when Russia invaded Ukraine in 2022. This disruption is upending trade routes, with the US exporting gasoline to Australia for the first time since 2023.

Asia, heavily reliant on Persian Gulf oil, is seeing suppliers cut back sales to manage shrinking stockpiles. Jet fuel prices have surged to about $3.89 a gallon in the New York area, up from near $2 for most of 2025. Airlines are forced to balance raising fares against higher fuel costs, while refiners cannot easily replace supplies kept off the market. The surge poses a potential political problem for Trump's allies ahead of midterm elections, as US gasoline prices hit a record high under his presidency.