What would happen to gas prices in the US if a conflict between the US and Iran escalated?

A military conflict between the United States and Iran would almost certainly cause significant disruption to global oil markets and lead to sharp increases in gasoline prices for American consumers. Iran sits at a strategically critical location along the Strait of Hormuz, a narrow waterway through which roughly 20 to 21 million barrels of oil pass every day, representing approximately 20 percent of global oil consumption. If Iran were to block or even threaten to block this strait, which it has repeatedly threatened to do in past tensions, the resulting supply shock would send crude oil prices surging on global markets almost immediately. Even the credible threat of such action, without any actual blockade, would cause traders to price in a significant risk premium, pushing oil futures higher within hours of any major escalation. The immediate effect on American gas prices would depend heavily on the severity and duration of the conflict. In past periods of Middle East tension, such as during the 2019 attacks on Saudi Aramco facilities or the killing of Iranian General Qasem Soleimani in January 2020, oil prices spiked by 5 to 15 percent within days before partially recovering. A full-scale military conflict would likely produce a much larger and more sustained price increase. Some analysts have estimated that a serious disruption to Strait of Hormuz traffic could push crude oil prices from their baseline to anywhere between 130 and 200 dollars per barrel depending on how long the disruption lasted, compared to the roughly 70 to 90 dollar range that has been typical in recent years. Since crude oil is the primary input cost for gasoline, retail prices at the pump could rise by one to two dollars per gallon or more in a severe scenario. The United States would have some tools available to cushion the blow. The Strategic Petroleum Reserve holds hundreds of millions of barrels of crude oil and has been used in past crises to release supply into the market and dampen price spikes. The Biden administration did this aggressively in 2022 following Russia's invasion of Ukraine, releasing over 180 million barrels to help bring prices down. However, the reserve has been drawn down significantly from its historical highs, which limits how much buffer it can provide in a prolonged crisis. Additionally, American domestic oil production has reached record levels in recent years, which means the US is less directly dependent on Middle Eastern oil than it was decades ago. But because oil is a globally traded commodity priced on world markets, American consumers are still fully exposed to global price swings regardless of where the oil is physically produced. Beyond the direct supply disruption, a conflict with Iran would create broader economic uncertainty that could affect energy markets in complex ways. Insurance costs for oil tankers operating in the Persian Gulf would skyrocket, adding to the cost of transporting oil even if the strait remained technically open. Regional allies and oil producers like Saudi Arabia and the UAE could face their own security threats, potentially disrupting their production as well. On the other hand, if a conflict led to a severe global recession, demand for oil could fall sharply, which would partially offset supply disruptions and limit how high prices could go. This is what happened during the 2008 financial crisis, when oil prices that had reached nearly 150 dollars per barrel collapsed to under 40 dollars as the global economy contracted. The political consequences of higher gas prices during a conflict would be substantial. American consumers are extremely sensitive to gasoline prices, and presidents have historically faced significant political backlash when prices rise sharply. This creates pressure on administrations to pursue diplomatic solutions or to release strategic reserves aggressively. However, in a genuine military conflict, market forces and geopolitical realities would likely overwhelm any short-term policy interventions. The bottom line is that any serious escalation between the US and Iran would almost certainly produce a meaningful and rapid increase in American gas prices, with the magnitude depending on how directly oil infrastructure and shipping lanes were affected and how long the conflict lasted.