US oil prices are closely watched Monday as the Iran war continues to damage critical oil facilities, leaving global supply in a precarious state as the conflict enters its third week. Analyst Patrick De Haan has forecast pump prices of $3.85 per gallon, with $4 gasoline still a possibility. The systematic targeting of oil infrastructure is accelerating the supply crisis that began with the first US-Israel strikes against Iran.
When the US-Israel campaign against Iran began on February 28, the national gasoline average was below $3 per gallon. In the three weeks since, a series of supply disruptions has pushed that figure 23% higher to $3.70. Consumer advocacy groups and business organizations have warned that the pace of the price increase is one of the fastest and most sustained in recent US history.
Friday’s US strike on Kharg Island, the hub of Iran’s oil export capacity, was the latest in a series of attacks on energy infrastructure that have stripped significant supply from global markets. Iran’s continuation of the Strait of Hormuz blockade has locked approximately 20% of the world’s daily oil supply out of international markets. Brent crude hovered between $103 and $106 per barrel Monday, while US crude remained near $94 following a brief Sunday high of $100.
California consumers remain the most severely impacted in the country, with state averages above $5 per gallon and some Los Angeles stations pricing above $8. National diesel costs for the freight and transport industries could reach $5.05 to $5.15 per gallon. The heads of Exxon, Conoco, and Chevron have each briefed White House officials on the escalating supply risks, with Exxon’s CEO Darren Woods specifically highlighting the destabilizing potential of speculative market activity.
US equities opened with modest gains Monday, the S&P 500 rising about 1% as crude prices briefly retreated. Oil company stocks have surged to all-time highs since the conflict began. For American consumers and businesses, however, the ongoing conflict continues to represent a significant and growing economic burden that shows no signs of easing in the near term.
