US oil prices are on track for more turbulence Monday, with three weeks of military conflict in Iran continuing to squeeze global energy supplies. Analyst Patrick De Haan has forecast that American drivers could pay up to $3.85 per gallon, while $4 remains a distinct near-term risk. The compounding disruptions from military strikes and shipping blockades have created one of the most strained global oil environments in recent years.
The crisis began when the US and Israel launched strikes on Iran on February 28, setting off a chain of supply disruptions that has pushed the national gasoline average from below $3 to $3.70—a 23% rise. That increase has arrived faster than most analysts predicted, reflecting the severity of the supply disruptions caused by the conflict. Consumer spending on transportation is being squeezed at a time when many households are already under financial pressure.
Last Friday’s US bombardment of Kharg Island, a vital node in Iran’s oil export network, sent fresh shockwaves through petroleum markets. Iran’s deliberate blockade of the Strait of Hormuz, through which approximately 20% of global oil flows, has stripped significant supply from world markets. Brent crude hovered near $103 to $106 per barrel on Monday, while US crude was priced around $94 after briefly cresting $100 over the weekend.
The geographic spread of price impacts has been uneven. California drivers are the hardest hit, with a statewide average above $5 per gallon and select Los Angeles stations exceeding $8. Diesel prices for freight and commercial transport could reach $5.05 to $5.15 per gallon nationwide. Oil company heads from Exxon, Chevron, and Conoco have warned White House officials about supply disruption risks, with Exxon CEO Darren Woods flagging the danger of speculative price spirals.
Wall Street greeted Monday with cautious optimism, with the S&P 500 gaining approximately 1% as oil prices briefly pulled back. Major oil company stocks have surged to all-time highs overall since the conflict began. The energy market outlook remains deeply uncertain and will continue to be shaped by the pace and intensity of the military campaign.