Rising Gas Prices

By Jacob Chen

Gas prices have been on the rise, burning a hole through all of our wallets and making driving less accessible. What is causing the prices to hit near-record highs, and what can we do to fight back and mitigate our spending?

The War in Iran

In the United States, gas prices are tied to oil prices globally. If oil prices are on the rise, you can expect gas prices to follow the same trend. The Middle East is home to a large portion of the world’s oil, which is used to make gasoline. As the war in Iran continues, oil prices are only expected to continue to increase. The Strait of Hormuz, as a result of wartime, has become heavily restricted. With less oil making its way out of Iran, the supply decreases which leads to an increase of demand. A demand which is extremely high during United States wartime due to the amount of oil needed by the United States military. The Department of Defense is the largest consumer of oil globally, and that is measured at its baseline during peacetime. Approximately 4.6 billion gallons of fuel are used each year by the Department of Defense. The amount of fuel needed rises drastically during wartime, and causes demand to increase steeply.

Refining Oil for Gasoline

Refining oil for gasoline has become more expensive. With the cost of a barrel of oil increasing drastically (~$75 USD/ barrel of oil before the war with Iran, ~$110 USD/ barrel of oil to date) so will the cost of refining that oil. The profit margins on refining oil to gasoline have increased from 2025 to now, which also causes gas prices to surge. This trend follows the sudden increase of the stock prices of big oil companies, like Exxon Mobile, or Chevron. Along with an increase of profit margins, limited quantities also push refineries to increase the price of refining. Less oil coming in means that there is also less oil to refine, which in turn leads to an increase of cost to make up for the lack of revenue typically coming in yearly.

What to Expect

As the War with Iran continues, oil prices can be expected to increase more, further increasing the cost of gas. Starting May 1st, 2026, the EPA will permit the sale of E15 gasoline. E15 gasoline is a type of gasoline that has 15% ethanol, which would lower the cost of the gasoline per gallon. While it may sound like gasoline will be getting cheaper, it isn’t actually any cheaper due to its lower efficiency. E15 is actually gasoline that is diluted by ethanol more than the standard gasoline (regular) with only 10% ethanol. E15 gas does not last as long, which means it will require more frequent gas changes. Generally, lower levels of ethanol are worse for engines and can cause premature engine damage when compared to gasoline with a lower amount of ethanol. To date, President Trump plans on blockading the Strait of Hormuz entirely, which would only worsen the already high gas prices. Until the war with Iran is over and the Strait of Hormuz is fully operational, we can continue to expect gas prices to increase.