Deep market anxiety is reflected in US oil prices as the Iran war enters its third week, with analysts projecting further gains on Monday. Petroleum analyst Patrick De Haan has forecast pump prices of $3.80 to $3.85 per gallon, while noting that $4 gasoline could still materialize. The unresolved conflict has made energy market participants deeply uncertain about the near-term supply and price outlook.
The current oil price crisis began on February 28, when US and Israeli forces launched strikes on Iran, immediately disrupting global oil supply chains and investor confidence. From below $3 per gallon before hostilities began, the national gasoline average has risen 23% to $3.70, one of the fastest peacetime escalations in US energy costs on record. Each week of continued conflict has reinforced the market’s anxiety about future supply availability.
The US strike on Kharg Island last Friday, targeting Iran’s most critical oil processing asset, added new uncertainty to an already volatile supply picture. Iran’s blockade of the Strait of Hormuz, which normally carries approximately one-fifth of global oil supply, continues to deny international buyers access to a vital energy corridor. Brent crude oscillated between $103 and $106 per barrel Monday, while US crude held near $94 after briefly reaching $100 the previous day.
California drivers are bearing the heaviest domestic price burden, with state averages exceeding $5 per gallon and some Los Angeles stations charging above $8. Diesel for commercial transport may reach $5.15 per gallon nationally. The White House has received direct warnings from Exxon CEO Darren Woods and leaders from Conoco and Chevron about supply deterioration and the potential for speculative trading to create a self-reinforcing price spiral.
Wall Street opened Monday cautiously, with the S&P 500 gaining about 1% following a brief cooling in crude prices. Oil company stocks have hit record highs since the conflict began. Until concrete progress toward de-escalation is made, US oil prices are likely to remain a source of sustained consumer and economic anxiety.
