U.S. Gas Prices Cross $4 A Gallon As Renewed Iran Conflict Shakes Oil Markets

By Sajjal Ali | Edited By Ammar Raza,July 20, 2026, 8:25 PM

The average gas price in the United States climbed above the psychologically significant $4-per-gallon mark on Monday as renewed fighting between the U.S. and Iran disrupted oil flows through the Strait of Hormuz, reigniting concerns over inflation and higher fuel costs.

According to the American Automobile Association (AAA), the national average reached just over $4 per gallon, up from $3.87 last week, while diesel prices rose to $5.10 per gallon from $4.87. 

The increase follows a sharp rally in crude oil markets, with Brent crude briefly topping $90 per barrel before easing after Iran signaled it remained open to diplomatic efforts.

The latest gas price surge reverses weeks of declining fuel costs that followed a June memorandum of understanding between Washington and Tehran, which had eased fears of supply disruptions. 

Those gains unraveled after renewed attacks on vessels in the Strait of Hormuz and retaliatory U.S. actions raised fresh concerns over one of the world’s busiest oil transit routes.

Source: Forbes’ X Post

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Hormuz Strait Conflict Fuels Oil Price Concerns

Since one fifth of the total oil consumption in the world passes through the Strait of Hormuz, any disruption will be highly risky for the energy sector in the world. 

Furthermore, according to the UK Maritime Trade Operations, a merchant vessel sailing near the coast of Oman caught fire after being struck by some unknown object.

According to experts, the situation is part of a bigger picture. Tom Kloza, who is an oil analyst working independently for Gulf Oil, points out that the attacks carried out by Ukraine on Russian oil refineries are adding to the problem of the shortage of refined fuels. According to him, the gas price will go up by 10-25 cents per gallon in the coming days.

Oil Price Surge Revives U.S. Inflation Fears

Increasing oil prices are raising concerns about the return of higher inflation following a period of slowing inflation rates. It is noted by many in the market press that low oil prices have played a role in helping to cool down the rate of inflation in the United States, but new supply problems could reverse this trend. 

It is emphasized that further escalation to other critical waterways would cause an increase in inflationary pressures.

What comes next?

But the rise in fuel prices is becoming an additional challenge for President Donald Trump as the midterm elections get closer. 

Although almost half of the American states are yet to record average gas prices at below $4 per gallon, the residents of California, Washington, and Hawaii pay over $5.

In the short run, the prospects for both consumers and businesses rest with diplomacy easing tensions. 

It is clear that Iran feels it has received offers from mediators in the region aimed at reducing the tensions with the United States, which may be a way out of the problem. Otherwise, the uncertain oil markets will continue to affect prices and inflation.

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