Gas prices across the U.S. jumped 11 cents overnight as the war with Iran continued to spread, pushing up the average cost nationwide to $3.11 per gallon, according to AAA.
The increase has pushed fuel prices to their highest level in more than three months, with the average cost of gas last at $3.11 on Dec. 1, 2025, data from the U.S. Energy Information Administration shows.
Motorists could face even higher prices within days, with Gasbuddy petroleum analyst Patrick De Haan predicting that the price could jump by 30 cents a gallon by the end of the week. Oil prices are surging amid disruptions to global oil shipments through the Strait of Hormuz, the strategically vital waterway connecting to the Persian Gulf that handles 20% of the world’s oil supply.
Brent crude, the international standard, climbed $4.72, or 6.2%, to $80.83 per barrel on Tuesday. Benchmark U.S. crude rose $6.22, or 8.8%, to $77.45 a barrel, according to FactSet.
Blow to consumers
Higher gas prices are a “blow to households’ real purchasing power,” Capital Economics analysts said in a report. But, they added, “Much depends on how long higher prices are sustained. A brief period with oil prices at $80 per barrel would have a small impact, contributing about 0.4% percentage points to headline inflation for the period in question.”
The overnight rise in gas prices comes after fuel costs had already edged higher this year on concerns about flaring tensions between the U.S. and Iran. On Monday, gas prices averaged about $3 per gallon across the U.S., roughly 20 cents higher than at the start of January, according to data from AAA.
Other energy costs also rising
Natural gas prices are also surging, which could translate into higher home heating and electricity prices for U.S. consumers. Futures for Dutch TFF, a benchmark for Europe, rose 39% on Monday, while Henry Hub Natural Gas Futures, a U.S. benchmark for natural gas prices, rose 5.4% on Tuesday.
On Monday, Qatar shut liquified natural gas (LNG) production at its Ras Laffan plant, which produces about 20% of the world’s supply of LNG, due to drone attacks, according to Bloomberg News.
“On the gas side, the vast majority of LNG transiting Hormuz originates from Qatar, with smaller volumes from the UAE,” EY-Parthenon chief economist Gregory Daco said in a research note. “Any attack on liquefaction or export infrastructure would therefore have a materially larger impact than a shipping disruption alone, as it would directly remove supply from the global LNG market.”
He added, “LNG markets are structurally less resilient than oil markets: they lack strategic reserves, operate with limited spare liquefaction capacity, and rely on regional and seasonal storage buffers.”
