U.S. gas prices surged to $4.43 per gallon, up 61% since December, as oil briefly hit $126 a barrel on Thursday, its highest level since the Iran war began.
According to The Kobeissi Letter, Americans will spend roughly $90 billion more on gasoline in a year than they would at $3/gallon.
AAA data shows California’s regular gas average hit $6.088/gallon as of Saturday, approaching its all-time high of $6.438 set in June 2022, while diesel reached $7.508/gallon below its peak of $7.747/gal in April 2026.
The Federal Reserve this week kept rates unchanged while flagging that “inflation is elevated,” directly referencing the surge in global energy prices.
RSM Chief Economist Joseph Brusuelas earlier warned that a Fed rate hike, rather than a cut, could come as soon as June, given the supply shock and the likelihood that the war will not be resolved soon.
GasBuddy’s Patrick De Haan also warned that if the Strait of Hormuz remains closed, “Americans will start changing their summer travel plans,” which could negatively impact airlines, cruise lines and online travel stocks.
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Source: Markets