US gas prices have climbed above $4 a gallon, pushed higher by escalating tensions with Iran and the lingering effect of Trump-era tariffs. The surge comes as crude oil markets brace for a potential new all-time high by the end of September.
The Iran factor
Tensions with Iran have added a risk premium to oil prices. The situation in the Middle East remains volatile, and any disruption to supply from the region could push prices even higher. The White House has not announced any new measures to stabilize the market, leaving traders to weigh the odds of a broader conflict.
Tariffs still biting
The Trump-era tariffs on imported goods, including oil-related products, continue to exert upward pressure on prices at the pump. While some tariffs have been modified or waived, the overall effect has been to keep energy costs elevated. Refiners are passing those costs along to consumers, and there's no sign of relief in the near term.
What the market is watching
Some market indicators now assign a 10.2% probability that crude oil will reach a new all-time high by September 30. That's a notable shift from earlier in the year, when the odds were lower. The benchmark crude price has already risen sharply, and further gains would almost certainly mean higher gasoline prices for American drivers.
The next major test will come with the next round of U.S. economic data and any further developments in the Iran situation. For now, drivers are likely to feel the pinch at the pump for weeks to come.
