US Oil Prices Could Crack $4 as Iran Conflict Enters Dangerous Third Week

The $4-per-gallon threshold is now within sight for US gasoline as the Iran conflict enters a dangerous third week, with petroleum analyst Patrick De Haan forecasting prices of $3.80 to $3.85 per gallon Monday. While De Haan says $4 is not yet a certainty, the conditions that would make it happen—continued supply disruption and speculative trading—are both present. The energy market is in one of its most precarious states in years.
The disruption can be traced directly to February 28, when the US and Israel began their military campaign against Iran, setting off an immediate and sustained rise in oil prices. The national gasoline average has risen 23% to $3.70 from below $3 before the conflict. Three weeks of unrelenting military operations have eroded the global supply buffer that previously helped absorb price shocks.
The US bombing of Kharg Island on Friday, one of Iran’s most important petroleum processing facilities, sent another shockwave through global energy markets. Iran’s concurrent blockade of the Strait of Hormuz has shut down the shipping lane responsible for roughly 20% of the world’s oil supply. Brent crude was trading between $103 and $106 per barrel Monday, and US crude settled near $94 after touching $100 on Sunday.
California remains the hardest-hit state for American consumers, with average prices exceeding $5 per gallon and some Los Angeles stations pricing fuel above $8. Diesel costs for trucking and freight are projected to reach $5.05 to $5.15 per gallon nationally. Exxon CEO Darren Woods has briefed White House officials directly about the worsening supply outlook and the speculative risks in the market, with similar warnings coming from Conoco and Chevron leadership.
US equities gained modestly Monday, with the S&P 500 up approximately 1% on the back of a temporary oil price retreat. Oil producer stocks have reached record highs since the conflict began, a stark contrast to the mounting financial pressure on American consumers. The trajectory of oil prices will remain hostage to military and diplomatic developments for as long as the conflict continues.