Iran Conflict Sends Crude Oil, Pump Prices Higher

Crude oil prices have surged to start this week after the weekend strikes on Iran by the U.S. and Israel. The more expensive oil and the usual seasonal factors are sending pump prices higher. The national average for regular gas shot up 11 cents overnight and is above $3 a gallon for the first time since December 1, 2025. Average prices are up in all 50 states. For the week, the national average for regular jumps 16 cents to $3.11 a gallon. This is the highest price since October 2025. The Oregon average rises four cents to $3.95 a gallon. This is one of the smallest week-over-week increases for a state in the country.

The last time the national average had a similar one-day spike was when Russia invaded Ukraine in early March 2022. The national average jumped 11 cents from $4.06 to $4.17 from March 7 to March 8. Meanwhile, the Oregon average is seeing a much smaller week-over-week increase. Last week, Oregon and Washington had the largest jumps in the nation after an outage of the Olympic Pipeline. But this week, both states have some of the smallest week-over-week increases in the country.

“The spike in crude oil prices in addition to the normal seasonal switch to summer-blend fuel mean drivers will see higher pump prices. Oregon and Washington were already hit with soaring gas prices after an outage at the Olympic pipeline last month,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “Markets continue to digest the latest developments in the conflict with Iran, and how they will impact energy infrastructure as well as access to the Strait of Hormuz.”

In general, every $1 increase in the price of crude oil leads to a 2.4- to 2.5-cent increase in the price of gasoline.

About 20% of the world’s oil and refined products flow through the Strait of Hormuz, which is the narrow passageway of the Persian Gulf and is bordered by Iran. Tankers traveling through the Strait of Hormuz carry oil from major producers in the Middle East including Saudi Arabia, Kuwait, Bahrain, UAE, Qatar, Iraq and Iran. Any disruption in the straight can impact global oil supplies. While the U.S. does not rely on Iranian oil, nations such as China and India do.

The Oregon average for regular gas began 2026 at $3.42 a gallon. The highest price of the year so far is today’s price of $3.95. The lowest price of the year so far is $3.33 on January 20.

The national average began 2026 at $2.83 a gallon. The highest price of the year so far is today’s price of $3.11. The lowest price of the year so far is $2.795 on January 11.

Demand for gasoline in the U.S. gasoline ticked down from 8.75 million b/d to 8.73 million for the week ending February 20. This compares to 8.45 million b/d a year ago. Total domestic supply of gasoline decreased from 255.8 million barrels to 254.8 million. Gasoline production decreased last week, averaging 9.2 million barrels per day, compared to 9.4 million barrels the previous week.

Gas prices typically rise starting in mid-to-late winter and early spring as refineries undergo maintenance ahead of the switch to summer-blend fuel, which is more expensive to produce and less likely to evaporate in warmer temperatures. The switch occurs first in California, which is why pump prices on the West Coast often rise before other parts of the country. The East Coast is the last major market to switch to summer-blend fuel. Most areas have a May 1 compliance date for refiners and terminals, while most gas stations have a June 1 deadline to switch to selling summer-blend. Switch-over dates are earlier in California with some areas in the state requiring summer-blend fuel by April 1. Some refineries will begin maintenance and the switchover in February.

Gas prices usually drop in the fall, due to the switch from summer-blend to winter-blend fuel, which costs less to produce. The switch starts in September. Many areas, including Oregon, can sell winter-blend fuel starting September 15. However, Northern and Southern California require summer-blend fuel through October 31. Prices usually decline to their lowest levels of the year in late fall and early winter before increasing again in the late winter and early spring.

The U.S. price of crude oil (West Texas Intermediate) has mostly been in the upper $50s to mid-$70s since September 2024.

This week, crude oil prices are near their highest prices in nearly two years, with WTI trading around $76 per barrel. Crude had mostly been in the $55 to $62 range for the past few months. Oil prices rose last month, in part driven by escalating tensions between the U.S. and Iran. Any conflict with Iran can send oil prices higher, as Iran is a major oil producer and about a fifth of the oil consumed globally travels through the Strait of Hormuz between Iran and Oman.

WTI is trading at $76 today, compared to $66 a week ago and $68 a year ago. In 2025, West Texas Intermediate ranged between $80.04 (January 15) and $57.46 (October 16) per barrel.  In 2024, WTI ranged between $66 and $87 per barrel. In 2023, WTI ranged between $63 and $95 per barrel. WTI reached recent highs of $123.70 on March 8, 2022, shortly after the Russian invasion of Ukraine, and $122.11 per barrel on June 8, 2022. The all-time high for WTI crude oil is $147.27 in July 2008.

Crude prices are impacted by economic news as well as geopolitical events around the world including the current conflict with Iran, economic uncertainty, the situation in Venezuela, tensions over Greenland, sanctions on Iran’s oil, unrest in the Middle East, the conflict between Israel and Hamas, and the war between Russia and Ukraine. Russia is a top global oil producer, behind the U.S. and Saudi Arabia.

In addition, moves by OPEC+ impact crude oil prices. Production cuts by the cartel in previous years tightened global crude oil supplies, which continued to impact prices. But in 2025, the cartel boosted production which put downward pressure on crude oil prices. For the first quarter of 2026, OPEC+ said it would not have production hikes in the first quarter of this year due to lower demand. However, at its meeting on March 1, OPEC+ said it would boost oil production by 206,000 barrels a day in April. This may help mitigate the impact of the Iran conflict on oil prices.

Crude oil is the main ingredient in gasoline and diesel, so pump prices are impacted by crude prices on the global markets. On average, about 47% of what we pay for in a gallon of gasoline is for the price of crude oil, 16% is refining, 20% distribution and marketing, and 17% are taxes, according to the U.S. Energy Information Administration.

Meanwhile, crude oil production in the U.S. remains at or near record highs. The U.S. Energy Information Administration (EIA) reports that crude production in his country is at 13.70 million barrels per day for the week ending February 20. Production has been at 13.5 million barrels per day many times since October 2024. The U.S. has been the top producer of crude oil in the world since 2018 and has been increasing its oil production since about 2009.

Quick stats

All 50 states and the District of Columbia are seeing week-over-week increases. Wisconsin (+33 cents) has the largest jump. Hawaii (+3/10ths of a cent) has the smallest. Last week, Oregon and Washington had the largest week-over-week increases in the country at 22 cents and 20 cents respectively, due to an outage of the Olympic Pipeline. This week, Washington (+3 cents) has the 49^th-largest increase, while Oregon (+4 cents) has the 47^th-largest increase.

California ($4.67) has the most expensive gas in the nation for the fourth week in a row. Hawaii ($4.40) is second, and Washington ($4.38) is third. These are the only states with averages at or above $4 a gallon. This week 16 states and the District of Columbia have averages in the $3-range. There are 31 states with an average in the $2 range this week.

The cheapest gas in the nation is in Oklahoma ($2.62) and Mississippi ($2.64) and. No state has had an average below $2 a gallon since January 7, 2021, when Mississippi and Texas were below that threshold. At the time, the COVID-19 pandemic drove significant declines in crude oil and gasoline demand in the U.S. and around the world.

The difference between the most expensive and least expensive states is $2.05 this week, compared to $2.25 a week ago.

Oregon is one of 49 states and the District of Columbia with higher prices now than a month ago. The national average is 23 cents more and the Oregon average is 47 cents more than a month ago. Oregon has the largest month-over-month jump in the nation, and Washington (+42 cents) has the second-largest increase. Hawaii (-1/10^th of a cent) is the only state with a month-over-month decrease.

Oregon is one of 21 states with higher prices now than a year ago. The national average is one cent less, while the Oregon average is 20 cents more. Oregon has the fourth-largest year-over-year increase in the nation. Washington (+24 cents) has the largest year-over-year jump in the country. North Dakota (-25 cents) has the largest year-over-year drop in the nation.

West Coast

The West Coast region continues to have the most expensive pump prices in the nation with all seven states in the top 10. It’s typical for the West Coast to have six or seven states in the top 10 as this region tends to consistently have fairly tight supplies, consuming about as much gasoline as is produced. In addition, this region is located relatively far from parts of the country where oil drilling, production and refining occurs, so transportation costs are higher. And environmental programs in this region add to the cost of production, storage and distribution.

As mentioned above, California has the most expensive gas in the country for the fourth consecutive week. Hawaii, Washington, Oregon, Nevada, Alaska and Arizona round out the top seven. Oregon is fourth for the third week in a row.

All seven states in the West Coast region have week-over-week increases, as do all 50 states in the nation. But the increases in this region are smaller than in many other parts of the country. Arizona (+14 cents) has the largest jump in the region, but has the 28^th-largest increase in the nation. Alaska (+6 cents), California (+5 cents), Oregon (+4 cents), Nevada (+4 cents), Washington (+3 cents), and Hawaii (+3/10^th of a cent) also have week-over-week increases.

The refinery utilization rate on the West Coast dropped from 87.4% to 81.1% for the week ending February 20. This rate has ranged between about 72% to 93% in the last year. The latest national refinery utilization rate fell from 91.0% to 88.6%.

The refinery utilization rate measures how much crude oil refineries are processing as a percentage of their maximum capacity. A low or declining rate can put upward pressure on pump prices, while a high or rising rate can put downward pressure on pump prices.

According to EIA’s latest weekly report, total gas stocks in the region fell from 30.29 million bbl. to 29.82 million bbl. for the week ending February 20. An increase in gasoline stocks can put downward pressure on pump prices, while a decrease in gasoline stocks can put upward pressure on pump prices.

Oil market dynamics

Crude oil prices have shot up following the weekend strikes on Iran by the U.S. and Israel and concerns about ships carrying oil being able to travel through the Strait of Hormuz. Anytime a major oil producer, such as Iran, is involved in a geo-political event, crude prices go up due to market concerns about global oil supplies.

Meanwhile, the EIA reports that crude oil inventories increased by 16.0 million barrels from the previous week. At 435.8 million barrels, U.S. crude oil inventories are about 3% below

the five-year average for this time of year.

At the close of Friday’s formal trading session, WTI rose$1.81 to close at $67.02. At the close of Monday’s formal trading session, WTI jumped $4.21 to close at $71.23. Today crude is trading around $73, compared to $66 a week ago. Crude prices are about $7 more than a year ago. ($68.37 on March 3, 2025)

Drivers can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile.

Diesel

For the week, the national average jumps 16 cents to $3.89 a gallon. The record high is $5.816 set on June 19, 2022. The Oregon average rises eight cents to $4.30. The record high is $6.47 set on July 3, 2022. A year ago the national average for diesel was $3.65 and the Oregon average was $3.86.

Find current fuel prices at GasPrices.AAA.com.