West Texas Intermediate (WTI) oil prices halted a four-day winning streak, trading around $99.60 per barrel during Asian hours on Tuesday, as speculation grew that U.S. President Donald Trump may end the Iran conflict, easing fears of prolonged supply disruptions [1]. The Wall Street Journal reported that Trump signaled to aides a willingness to halt the campaign even if the Strait of Hormuz remains largely shut, which analysts view as a short-term factor behind the price drop. However, ongoing U.S. troop movements and recent attacks, including Iran's strike on a Kuwaiti oil tanker near Dubai, continue to pose risks to global energy supply [1]. Iran-backed Houthis have escalated the conflict by targeting Israel, and Tehran is reportedly preparing disruptions in the Red Sea [1].
U.S. gasoline prices have surged above $4 per gallon for the first time in more than three years, up more than 30% since the U.S. and Israel attacked Iran in late February [2]. Diesel prices have also risen more than 40% to over $5 per gallon, with broad implications for the U.S. economy [2]. The nationwide average gas price hit $4.018, the highest since August 2022, according to AAA [2]. Oil prices have surged more than 50% since the war began, with Brent prices on pace for a record monthly gain since the creation of the futures contract in 1988, and U.S. crude oil heading for its biggest monthly gain since 2020 [2].
David Doyle, head of economics at Macquarie Group, expects the average monthly gas price in March to be 25% higher compared with February, marking the largest monthly increase since October 1990 [2]. Andy Lipow, president of Lipow Oil Associates, noted that while consumers have already seen the impact of rising gasoline and airline ticket prices, the full effects of higher diesel prices will flow through the economy over the next few months [2]. Patrick De Haan also indicated that consumers could see the impact by April through higher prices at supermarkets and for online orders [2].
Vice President JD Vance acknowledged the challenges posed by rising gas prices, promising that the spike is temporary and will fade after the war ends [2]. The EPA is temporarily lifting some regulations to increase gas supplies in an effort to ease prices [2]. Rising fuel costs have become a political challenge for Trump and the Republican Party ahead of the November midterm elections, as higher oil prices strain U.S. household budgets already pressured by inflation [1].
CONCLUSION
The Iran conflict has triggered a sharp surge in oil and fuel prices, with WTI and Brent reaching multi-year highs and U.S. gasoline surpassing $4 per gallon. While Trump signals a possible truce that could ease supply fears, ongoing risks and attacks continue to unsettle markets. Analysts and officials expect elevated prices to persist in the short term, with broader economic impacts likely to be felt in the coming months.