US gas prices hit $4 per gallon for first time since 2022

Mario Tama/Getty Images via CNN Newsource
By Ivana Kottasová and Chris Isidore, CNN

(CNN) — The war in the Middle East has pushed the average price Americans are paying for gas to $4.02 Tuesday, topping the $4 per gallon mark for the first time since 2022, according to AAA.

Gas prices have surged since the United States and Israel launched their war against Iran. Prices at the pump have risen by about $1 per gallon over the past month, and are now higher than at any point during President Donald Trump’s two terms.

The 34.7% rise from the $2.98 a gallon that AAA recorded a month ago is a larger monthly increase than during any earlier oil shocks, including after Hurricane Katrina in 2005 or Russia’s full-scale invasion of Ukraine in 2022. The latter spike eventually took prices to a record $5.02 a gallon.

The breaching of the $4 level comes after a week in which American drivers enjoyed some of the slowest moves in retail gas prices since the start of the war in Iran.

Prices have risen by fractions of a penny for most of the week, sometimes even edging lower. The average price stayed at $3.98 for six straight days when rounded to the nearest cent before edging up to $3.99 Monday.

Gas prices go hand in hand with fluctuations in oil prices, which have reached the highest levels since 2022.

US crude oil prices have surged more than 50% in March, settling above $100 per barrel for the first time since July 2022 Monday after comments by Trump raised fears that the conflict in the Middle East could escalate even further.

On Tuesday, WTI, the US benchmark, was little changed at $102 a barrel.

The war in Iran has essentially shut off oil tanker traffic through the vital Strait of Hormuz, choking off about 20% of the world’s oil supply. While America, the world’s largest oil producer, gets relatively little crude from the Middle East, prices are set in a global commodity market.

Higher oil prices come amid market uncertainty that the war will end soon and reopen the strait.


Global uncertainty


Even if fighting were to end and crude prices were to fall, it would take some time for pump prices to start to decline. Previous increases still have to work their way through the system.

“There’s an old expression – gas prices go up like a rocket and come down like a feather,” said Tom Kloza, an independent oil analyst.

There’ll be more pressure on the Trump administration to end the war and reopen the strait if oil prices continue to rise. Car owners will also start cutting back on driving if gas prices keep climbing. Kloza said it’s possible that states could halt collecting gas taxes.

State taxes average 33 cents a gallon across all 50 states and Washington, DC, ranging from 9 cents a gallon in Alaska to 71 cents in California. There could even be a move to pause the 18.4 cent federal gas tax.

The Environmental Protection Agency announced last week that it was relaxing regulations requiring cleaner burning gasoline in the summer months to help limit smog. The blend is more expensive to produce, but the change will only reduce gas prices by about 5 to 10 cents.

“So $5 gas is in the realm of possibility,” Kloza said. “But I think they’d pull out all the stops they can to stop that from happening, including gas tax holidays.”

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