U.S. Gasoline and Diesel Prices Expected to Rise Amid Ongoing Ukraine and Iran Conflicts

U.S. gasoline and diesel prices are projected to increase on Wednesday and Thursday as geopolitical tensions in Ukraine and Iran continue to constrain global oil supplies, analysts said. Tom Kloza, chief energy advisor at Gulf Oil, warned that fuel margins have not yet reflected recent wholesale price hikes and that “watch for large increases in Great Lakes and Rocky Mountain states.”

Patrick De Haan, head of petroleum analysis at GasBuddy, noted that the U.S. average diesel price had reached $6.30 per gallon and gasoline $4.36 per gallon, and he expects both to rise further in the next 48 hours, potentially pushing diesel above $6.60 per gallon.

Data from the American Automobile Association show the national average gasoline price climbed to $4.37 per gallon on Wednesday, up from $4.33 the day before and $4.22 a week earlier. Prices are more than $1 higher than a year ago, when the average was $3.19 per gallon. California posted the highest state average at $6.04 per gallon, while Indiana recorded the lowest at $3.75 per gallon.

Typically, gasoline prices fall after Labor Day as summer travel wanes and refiners shift to cheaper winter-grade fuel. However, analysts said that ongoing conflicts could offset the usual seasonal decline. The wars have disrupted oil flows through the Strait of Hormuz, which handles about 20% of world oil shipments, and a recent drone attack temporarily closed Saudi Arabia’s East-West pipeline, further tightening supply.

Brent crude was trading around $107 a barrel on Wednesday, up from roughly $70 before the conflicts escalated. The higher fuel costs are expected to add pressure to inflation and could become a political issue ahead of the November midterm elections.