US oil prices are setting new benchmarks for the current crisis cycle as the Iran war’s third week brings fresh supply pain to global energy markets. Analyst Patrick De Haan has forecast Monday pump prices of $3.80 to $3.85 per gallon, with $4 gasoline remaining a near-term possibility. Each week of the conflict has pushed prices to levels that would have seemed unlikely just a month ago, when gasoline was selling below $3 per gallon nationally.
The benchmark for the current price crisis was set on February 28, when US and Israeli forces launched the first strikes against Iran, immediately disrupting global oil supply and setting off a sustained rise in prices. From below $3 per gallon before the war, the national average has climbed 23% to $3.70, with each successive week of fighting pushing the benchmark higher. The conflict has effectively reset the pricing baseline for American energy consumers.
Friday’s US strike on Kharg Island, attacking Iran’s most critical oil export infrastructure, set a new benchmark for infrastructure damage in the conflict. Iran’s continuing blockade of the Strait of Hormuz has set a new benchmark for sustained supply disruption, denying global markets access to roughly 20% of their daily oil supply. Brent crude fluctuated between $103 and $106 per barrel Monday, while US crude held near $94 following a brief $100 spike on Sunday.
California has set a new benchmark of its own, with the state average for pump prices surpassing $5 per gallon for the first time in years, and some Los Angeles stations pricing above $8. Diesel for commercial transport nationally could reach $5.15 per gallon. Exxon CEO Darren Woods, along with leaders at Conoco and Chevron, has engaged the White House directly to raise supply concerns, with Woods warning that speculative market behavior risks setting new and unwelcome price benchmarks.
Wall Street made modest gains Monday as oil prices briefly retreated, the S&P 500 rising approximately 1% from its open. Oil company shares have set their own records, reaching all-time highs since the conflict began. The new benchmarks being set by US oil prices reflect the serious and growing economic consequences of a conflict that continues to escalate.