California has crossed the $5 per gallon average while US oil prices climb broadly, as the Iran war enters its third week and shows no signs of winding down. Analyst Patrick De Haan has projected Monday pump prices of $3.80 to $3.85 per gallon nationally, with $4 gasoline still within reach. California’s crossing of the $5 threshold is a stark indicator of the severity of the energy crisis unfolding across the country.
The conflict began February 28 when the US and Israel launched their campaign against Iran, immediately disrupting global oil supply and pushing prices higher across the country. The national average has since climbed 23% to $3.70 from below $3 per gallon, with California leading the way in price increases. The state’s energy costs, already higher than the national average, have been amplified further by the conflict, with Los Angeles stations in some areas now exceeding $8 per gallon.
The US strike on Kharg Island last Friday, targeting Iran’s most important oil export processing hub, added fresh supply concerns to an already strained global energy market. Iran’s continued blockade of the Strait of Hormuz has restricted access to roughly one-fifth of the world’s daily oil supply. Brent crude fluctuated between $103 and $106 per barrel Monday, while US crude traded near $94 following a brief spike to $100 the prior day.
Nationally, diesel prices for commercial transport could reach $5.05 to $5.15 per gallon, adding to the inflationary pressure on consumer goods and logistics services. Oil company executives from Exxon, Conoco, and Chevron have all engaged the White House on the worsening supply picture, with Exxon CEO Darren Woods issuing direct warnings about the supply crisis and the risk of speculative market inflation. The combination of physical shortages and speculative trading threatens to push prices even beyond current elevated levels.
Wall Street opened the week on a mildly positive note, the S&P 500 rising approximately 1% as crude prices briefly softened. Oil sector stocks have reached all-time highs since the conflict began. California’s $5 average is not just a California story—it is a preview of what other major markets may face if the Iran conflict continues to escalate.