A former White House energy adviser warns that gasoline prices are approaching the dreaded $5 per gallon threshold once again, this time driven by the Iran conflict rather than external shocks. Unlike 2022's Ukraine invasion crisis, the current disruption stems from deliberate U.S. military action, catching markets off-guard.

The Strait of Hormuz closure has removed over 12mn barrels per day from global supply, creating what the IEA calls the greatest energy security challenge in history. Compounding the crisis, refinery capacity is shifting toward jet fuel production as crack spreads hit a record $80 per barrel, reducing gasoline output by 340,000 barrels daily despite rising demand.

The tools that worked in 2022 are largely exhausted. The Strategic Petroleum Reserve has already released 80 million of its committed 172 million barrels, while U.S. crude exports hit record levels with no additional surge capacity. Rising Treasury yields and mortgage rates signal broader economic stress.

Diplomatic resolution with Iran becomes critical before the economic fallout intensifies. The administration faces a stark choice: pursue nuclear and security negotiations or watch inflation spiral through the summer driving season.