High Gas Prices Have Cost American Drivers Extra $25 Billion, Study Finds

Americans are facing the highest gasoline prices in four years as millions hit the highways this holiday weekend, with the prospect of $5-a-gallon a very real possibility. Some 45 million Americans are expected to travel at least 50 miles over the Memorial Day weekend, according to AAA’s latest projections, setting another record for the first big summer holiday. According to the “Iran War Energy Cost Tracker,” a monitoring tool developed by Brown University, the financial burden on American citizens had reached an estimated $25.4 billion by Saturday. That’s an extra $193 per household, the site says.The staggering figure reflects the soaring costs of both gas and diesel, which have been primarily driven by severe disruptions to global oil supplies and the military blockade of the Strait of Hormuz.Since February 28, when the conflict began — and the national average was $2.98 per gallon — the national average for regular gasoline has skyrocketed by 51.6 percent, hitting $4.52 per gallon on Saturday, AAA reports. According to data from CNBC, this represents the highest pre-Memorial Day price the country has experienced since 2022, when global supplies were disrupted by Russia’s invasion of Ukraine.Industry experts warn that the situation at the pump could get worse in the coming weeks. A GasBuddy petroleum analyst, Patrick De Haan, told CNBC that gasoline could surge past $5 a gallon sometime in June if shipping through the Strait of Hormuz remains frozen.The rising cost of fuel stands as one of the most visible and immediate economic impacts of the Middle East war. The Strait of Hormuz — a critical Persian Gulf shipping lane that previously handled roughly one-fifth of the global crude oil supply — remains at the very center of the geopolitical turmoil. Iran’s blockade and subsequent strikes on regional energy infrastructure have caused crude oil prices to surge more than 40 percent above their pre-war levels.While the national gasoline average briefly eased when President Trump suggested potential diplomatic progress with Tehran, market analysts and traders remain doubtful about a swift or peaceful resolution. “The president implies that there’s a lot of progress, but I don’t know how many more head fakes we’re going to see,” Mr. De Haan told CNBC.In an attempt to ease the market strain, the Trump administration has coordinated with the International Energy Agency to release 400 million barrels of oil and refined products, which includes 172 million barrels drawn directly from U.S. emergency reserves.Meanwhile, diesel prices are climbing even faster than gasoline, with some energy experts warning the fuel could soon reach $6 or $7 a gallon as European and Asian markets scramble to replace lost Middle Eastern supplies with American exports.

High Gas Prices Have Cost American Drivers Extra $25 Billion, Study Finds

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