The Iran war has created the worst energy supply crisis in years, and US oil prices are heating up again as the conflict enters its third week with no diplomatic resolution on the horizon. Petroleum analyst Patrick De Haan has forecast Monday pump prices of $3.80 to $3.85 per gallon, while $4 gasoline remains a near-term possibility. Energy market analysts are drawing comparisons to previous supply crises, noting that the current situation is among the most severe in recent memory.
The supply crisis began on February 28 with the launch of the US-Israel campaign against Iran, which immediately triggered a sustained and significant rise in global oil prices. From below $3 per gallon before the conflict, the national average has climbed 23% to $3.70, driven by the systematic targeting of oil infrastructure and the strategic closure of shipping lanes. The speed and scale of the supply disruption have led analysts to rank the current crisis among the most severe in recent US history.
Friday’s US strike on Kharg Island, attacking Iran’s central oil processing hub, has deepened what is already being called one of the worst energy supply crises in years. Iran’s continuation of the Strait of Hormuz blockade has denied world markets access to roughly one-fifth of global daily oil supply. Brent crude ranged from $103 to $106 per barrel Monday, while US crude held near $94 after briefly reaching $100 the previous day.
California faces average pump prices above $5 per gallon, with some Los Angeles stations posting above $8. Diesel for commercial transport could reach $5.15 per gallon nationally. Senior oil executives from Exxon, Conoco, and Chevron have each engaged the White House on the worsening crisis, with Exxon’s Darren Woods specifically highlighting the danger of speculative market activity amplifying the already severe supply disruption.
Wall Street gained modestly Monday as oil prices briefly pulled back, the S&P 500 rising approximately 1%. Oil company stocks have reached all-time highs since the conflict began, reflecting the financial gains that come with elevated oil prices. The resolution of the worst energy supply crisis in years will require both a military and diplomatic breakthrough that appears distant given the current trajectory of the Iran conflict.