Gas prices have climbed after U.S. and Israeli strikes on Iran, which sent global oil prices sharply higher, according to reporting from Reuters and The Associated Press.
AA tracks gas prices each week in the U.S.
“The national average for a gallon of regular gasoline jumped nearly 27 cents since last week to $3.25. The conflict in the Middle East has sent crude oil prices higher to the mid $70/barrel range. The recent increase puts the national average at the same price as it was in early April of 2025,” according to data from AAA.
Gas prices do traditionally climb in spring, but this jump is higher than normal.
“Springtime typically sees higher gas prices as gasoline demand rises and summer-blend gasoline production begins. The last time the national average made a similar weekly jump was back in March of 2022, during the start of the Russia/Ukraine conflict,” the national automobile service shared.
Gas prices don’t just impact what we pay at the pump; they also impact many supply chains and the cost of goods. That can drive prices higher for many items.
Costco shares good news and a dire warning
Costco CFO Gary Millerchip was bullish on the dimming impact of inflation during the warehouse club‘s second-quarter earnings call.
“While egg price deflation is expected to continue to be a headwind to sales in food and sundries for the foreseeable future, we’re seeing significant unit and market share growth in eggs because of our strong value proposition. Overall inflation decreased slightly in Q2 as we saw lower inflation in foods and sundries and fresh, led by deflation in produce, eggs and dairy,” he shared.
The news, however, was not all upbeat.
“This was partially offset by slightly higher inflation in nonfoods,” he added.
Millerchip also shared a warning based on the current military action in Iran.
“The supply chain was also relatively stable in Q2, and our merchants feel good about our current inventory position heading into the spring. That said, as we look at the rest of the fiscal year, the situation in the Middle East could impact fuel costs and shipping schedules if there is instability in the region for a sustained period of time,” he shared.
Gas prices will continue to rise
“Given current market conditions, the national average price of gasoline could climb toward $3.50 to $3.70 per gallon in the coming days if oil continues rising and supply disruptions persist,” GasBuddy analyst Patrick De Haan told Reuters.
The United States has lessened its dependence upon foreign oil, but it’s still impacted by global demand.
“The U.S. has weaned itself off of its dependence on Middle Eastern crude, but obviously Asian refineries, and to a lesser extent, European refineries have not,” Denton Cinquegrana, chief oil analyst with OPIS told Reuters. “That’s what you’re seeing happen in the spot market, because the demand for U.S. exports rises, and so the price rises.”
That’s likely to push gas prices over $4 per gallon by the weekend, according to The Wall Street Journal.
A former adviser to President Barack Obama and Joe Biden said the situation could cause “the biggest energy shortage in history.”
“The average price of gasoline in the U.S. is barreling toward $3.50 a gallon, and American drivers can expect to pay $4 a gallon by the weekend, Amos Hochstein, a former energy advisor to the Biden and Obama administrations, said on CNBC’s “Squawk Box” on March 9.
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Higher gas prices hurt consumers
“In that sense, the rise in gas prices acts like a tax on a family’s household budget, and they respond by cutting back on other spending,” Chris Varvares, senior managing director and co-founder of Macroeconomic Advisers, told Fox News.
“The end result is when we look at gasoline consumption, it doesn’t change very much, but other consumption as we measure it goes down. And overall consumer spending is recorded as having declined.”
Costco will try to offset that by lowering prices wherever possible. The warehouse club will also leverage its Kirkland Signature brand to keep prices down.
“Kirkland Signature remains a top focus to deliver great value for our members, with KS items typically offering 15% to 20% value compared to the national brand alternative with equal or better quality. In Q2, we launched approximately 30 new KS items, including crispy wings, blackened salmon, and various apparel items,” Millerchip said.
He also pledged to continue working to lower prices wherever possible.
“As Ron [CEO Ron Vachris] mentioned earlier, our goal is to be the first to lower prices where we see opportunities to do so,” he added.
Related: Costco takes big step to fix one of members’ biggest complaints
