Why Does the War With Iran Affect Gas Prices?

By Wyatt Snider

The average cost of gas in the US sits at $4.01, $3.63 on average for Georgia, and $3.61 in Carroll county according to AAA Fuel Prices on March 31, 2026. The average price of $4.01 marks the first time in over three years that the price of gas surpassed the $4 mark according to WSB and Georgia Public Broadcasting.

Due to the conflict Iran has shut down the Strait of Hormuz, a key shipping channel in the Middle East located between Iran and Oman used internationally to transport many goods in global trade. One of those goods largely transported through is of course oil.

Why does the conflict in Iran and closing of the Strait of Hormuz affect oil and gas prices?

An estimated 20% of global oil and LNG(Liquified Natural Gas) is transported through the Strait of Hormuz, primarily heading to Asia according to the Federal Reserve Bank of Dallas. Shutting down this trade channel immediately cuts out the supply and leads to a shortage.

With the supply of global crude oils cut off the price per barrel of crude oil went from roughly $70 a barrel to nearly $120.

Refineries have also been hit hard. Due to the shortage of crude oil the reduction of refined products like gasoline, diesel, and aviation fuel has lead to raised prices.

The markets also react in fear of a prolonged war raising prices in anticipation of speculated shortages per the Federal Reserve Bank of Dallas.

These factors send a shock worldwide leading to raised prices in Europe, North America, and Asia with Asia being hit the hardest.

According to the U.S. Energy Information Administration the US is a net exporter of oil, so why are gas prices so high here?

The US is a net exporter of oil and energy as a whole, and has been annually since 2020 per the U.S. Energy Information Administration. The US is also a net importer of crude oil. Specifically the US imports a cheaper, heavier, more “sour” crude oil because many of our domestic refineries are geared more towards processing that type of oil according to a CBS News in March.

Even though the US produces and refines its own crude oil, crude oil is traded on the global market and is subject to international pricing due to global demand. Geopolitical conflicts, such as the war with Iran and the Ruso-Ukranian war, and supply shocks will directly affect the pricing of crude oils as international markets will panic in fear of a shortage.

When can we expect gas prices to return to normal or at least come back down?

Gas prices are expected to peak at an estimated $4.25 around May this year per CNN and Forbes. Relief is not being expected till much later in the year with other projections seeing moderation coming in late 2026 into 2027.

As explained by CNN, gas prices are likely to remain elevated over $3 a gallon for the near future due to the feather effect. A shoot or rocket up in prices and a long graceful comedown like a feather.