D.C.-area drivers are paying just over $3 a gallon for regular gasoline, but that relative stability may prove short-lived after U.S. and Israeli strikes on Iran sent global oil prices sharply higher and injected fresh volatility into energy markets that directly shape what District residents pay at the pump.
“Gas prices are already rising ahead of the summer driving season as people travel more,” according to AAA, which reported that the national average for regular gasoline climbed more than 5 cents last week to $2.98.
In the District, AAA lists the current average price for regular gasoline at $3.103 per gallon, compared with $3.228 a year ago. While those numbers suggest moderation compared with the record $5.262 per gallon reached in June 2022, analysts say the recent surge in crude oil threatens to reverse that trend.
Oil markets reacted immediately to the escalating conflict. U.S. crude traded 7.6% higher at $72.12 per barrel Monday, while international benchmark Brent crude rose 8.6% to $79.11 per barrel as disruptions to tanker traffic through the Strait of Hormuz reportedly heightened concerns about global supply. The narrow waterway handles roughly 20% of the world’s oil supply, making it one of the most critical energy transit points in the world.
The Associated Press reported that tanker traffic dropped sharply and that attacks and electronic interference were reported near the strait. QatarEnergy also announced it would pause liquefied natural gas production due to military attacks on its facilities, pushing European natural gas futures dramatically higher.
Because crude oil is the single largest component of retail gasoline prices, the spike has immediate implications for consumers. Research cited by the Federal Reserve Bank of Dallas shows that a $10 increase in crude typically translates into roughly a 25-cent increase per gallon within about 20 days. With crude jumping roughly $5 per barrel in one trading session, even a partial pass-through could add double-digit cents to local pump prices if elevated levels persist.
“I fully expect that by Monday night, you could credibly say that gas prices are being impacted by oil prices having gone up,” GasBuddy analyst Patrick De Haan told NBC News. “It won’t be a spike.”
As of Monday morning, some Washington stations were still listing prices below the District average. GasBuddy reported regular gasoline at $2.65 at Costco on Market Street NE and between $2.77 and $2.89 at several stations along Benning Road and in Northeast Washington. Those listings were posted within the previous 24 hours, but retail prices can adjust quickly when wholesale costs climb.
Beyond gasoline, overall economic signals show investor anxiety. Stocks fell sharply at the opening of trading, and gold prices jumped as traders sought safer assets. Natural gas prices in Europe surged more than 40% after Qatar’s production halt, raising concerns about broader energy costs.
Much now hinges on whether the conflict remains contained or expands to additional oil-producing infrastructure in the region. Prolonged disruption in the Strait of Hormuz would present the most serious risk to sustained higher prices.
“If we start to see additional direct attacks against energy infrastructure, not just in Saudi Arabia and Kuwait, but in other countries in the region, then that’s when the market will start to think about a push toward $90 and perhaps even beyond,” Torbjorn Soltvedt, principal Middle East analyst at Verisk Maplecroft, told The Associated Press.
At the same time, OPEC+ nations announced plans to increase production by more than 200,000 barrels per day starting next month in an effort to calm markets. Whether that additional supply offsets conflict-related disruptions remains uncertain.
“The key question for the global economy is obvious: Will the Strait of Hormuz be effectively closed for oil and gas exports for more than a few weeks?” said Holger Schmieding, chief economist at Berenberg Bank.