Global Gas Prices Surge Amid Middle East Conflicts

Drivers worldwide are experiencing costly gasoline prices this week. According to Global Petrol Prices, the average price has reached $5.89 per gallon, reflecting an increase of roughly a dollar since the tensions in Iran flared. Prior to February 23, a few days before the U.S. and Israel launched joint attacks on Iran, the worldwide average was $4.92 per gallon.

In the U.S., similar trends have been observed. Late February saw Americans paying about $2.98 per gallon. As of this Thursday, the national average is at $4.28 per gallon, based on figures from the American Automobile Association (AAA). This marks a rise of $1.30 since February 28, adding substantial financial burdens to drivers who were already impacted by earlier conflicts, notably Russia’s invasion of Ukraine in 2022.

American consumers, according to Patrick De Haan from GasBuddy, face an increased expenditure of $377 million daily at gasoline pumps, amounting to an additional $4.63 billion a week.

Even though a minor drop is usually expected in fall, this hope remains uncertain due to continued unrest in Ukraine and Iran. Americans have been somewhat shielded from the most drastic price surges impacting other parts of the world. AAA data shows U.S. prices are approximately $1.61 below the global average.

Lowest and Highest Global Fuel Prices

The turmoil in the oil market, particularly the effective closure of the Strait of Hormuz, has driven oil prices sharply upward worldwide. The Strait used to account for a fifth of global oil and gas flows.

The five countries with the cheapest gas—all major oil producers or heavily subsidized markets—are Libya ($0.09 per gallon), Iran ($0.11), Venezuela ($0.132), Angola ($1.238), and Kuwait ($1.287). These prices benefitted from government subsidies, domestic oil output, and state involvement in fuel markets.

On the other hand, nations with the highest prices include Hong Kong ($15.892), Malawi ($12.245), Norway ($11.765), Denmark ($11.100), and the Netherlands ($10.371). These countries impose significant taxes and environmental levies that elevate fuel costs above the global average. Yet, these highest-priced markets did not suffer the worst shock from the Iranian conflict.

Australia recorded the most substantial gas price spike, with a 42% increase from February 23 to March 23, the harshest globally. Sri Lanka, the United States, Canada, and Pakistan followed, with increases of 33.8%, 30.2%, 25.2%, and 24.4%, respectively.

Conversely, certain markets with regulated prices or state subsidies—such as Saudi Arabia, Kuwait, Oman, Bahrain, India, and Bangladesh—remained steady amid the global disturbances.

Future Expectations for Gas Prices

Future price changes hinge on developments in the Middle East. Reestablishing the flow through the Strait of Hormuz is crucial. Despite ongoing hostilities between the U.S. and Iran, a resolution seems distant.

If the Strait reopens, gas prices won’t immediately reduce, said Denton Cinquegrana of the Oil Price Information Service.

Commentary from Patrick De Haan disputed any certainty in President Donald Trump’s statement suggesting post-election oil price declines. He noted seasonal shifts in U.S. gasoline demand might offer minor relief, yet potential ongoing conflicts—like the U.S.-Iran tensions and Ukraine’s attacks on Russian refineries—could offset these benefits.