US Oil Prices Stubbornly High as Iran War Squeezes Global Energy Markets

US oil prices remain stubbornly high as the Iran war squeezes global energy markets and enters its third week with no resolution in sight. Analyst Patrick De Haan has forecast Monday pump prices of $3.80 to $3.85 per gallon, while $4 gasoline remains a near-term possibility. Three weeks of sustained military conflict have created a supply shortage that is directly translating into higher costs for American energy consumers.
The current oil price surge was triggered on February 28 by the launch of the US-Israel campaign against Iran, which immediately disrupted global oil markets and set off a sustained round of price increases. The national gasoline average has climbed 23% to $3.70 from below $3 per gallon before the conflict, driven by the progressive destruction of oil infrastructure and the closure of key shipping lanes. The sustained nature of the increase has raised concerns about the long-term pricing environment for US energy consumers.
Friday’s US strike on Kharg Island, one of Iran’s most strategically critical oil processing sites, further tightened global supply. Iran’s ongoing blockade of the Strait of Hormuz, through which approximately 20% of global oil flows, has removed a substantial volume of petroleum from world markets. Brent crude traded between $103 and $106 per barrel Monday, while US crude settled near $94 following a brief Sunday spike to $100.
The domestic price impact has been most severe in California, where averages have exceeded $5 per gallon and some Los Angeles stations are charging above $8. Diesel for commercial transport may reach $5.05 to $5.15 per gallon nationwide. The leaders of Exxon, Conoco, and Chevron have each briefed White House officials on the supply risks, with Exxon’s Darren Woods specifically warning that speculative traders could create a price spiral disconnected from underlying supply and demand fundamentals.
Wall Street started the week cautiously, with the S&P 500 gaining approximately 1% following a temporary softening in crude prices. Oil company stocks have reached all-time highs since the conflict began. The stubbornly high price environment will persist as long as the Strait of Hormuz remains blocked and military operations continue to erode global oil supply.