U.S. Gas Prices Hit $4.50 Following Iran Blockade

National gasoline prices in the United States rose to an average of $4.50 per gallon by May 12, 2026, marking a nearly 52% increase since late February. The surge follows an oil shock triggered by Iran closing the Strait of Hormuz to tanker traffic—a route that handles 20% of global oil shipments—in response to airstrikes conducted by the United States and Israel. Despite record U.S. crude production of 13.57 million barrels per day, global supply remains unstable with crude trading around $102 per barrel.

Analysts from GasBuddy and JPMorgan Chase & Co. warned that prices could exceed $5 per gallon by June. This volatility coincides with the start of the summer driving season, with AAA projecting record travel by 45 million Americans for the Memorial Day holiday. Former President Donald Trump suggested suspending the federal gas tax to mitigate costs after U.S. forces abandoned a short-lived attempt to escort tankers through the strait.

Regional disparities have intensified, particularly in California, where some Chevron stations reached $8.71 per gallon. Branded stations there charge an average of 48 cents more than unbranded alternatives. The Western States Petroleum Association attributed this premium to higher franchise standards and state policy constraints. However, the California Division of Petroleum Market Oversight suggested the gap reflects an oligopoly, noting that four companies control 90% of the state's refining capacity.