The rise is being felt across the country, though prices vary sharply by state. California and Hawaii have averages of about $5.50 per gallon, while the national figure is now almost $1 higher than it was a year ago. The renewed increase follows several months in which gasoline prices had eased after brief peace agreements between Washington and Tehran.
Gas Prices Rise Again as Diplomatic Talks Remain Stalled
According to AAA, the national average for regular gasoline stood at $4.0654 per gallon on August 18, compared with $4.0636 the previous day and $4.0116 a week earlier. One month ago, the average was $3.9923, while the price a year earlier was $3.1376.
The current figure remains below the record national average of $5.0165 for regular gasoline, set on June 14, 2022. Diesel prices are also elevated, with AAA reporting a current national average of $5.4677 per gallon, compared with $3.6909 a year earlier.
Energy prices have remained high since the US-Israel war with Iran began at the end of February and the Strait of Hormuz was blocked. The waterway carries about one-fifth of the world’s oil. Brent crude reached $112 a barrel in March, its highest level since 2022, before falling back toward $85 a barrel. Even at that level, it remains about 30 percent higher than a year earlier.
The Guardian reported that gasoline prices had declined during periods when the United States and Iran reached brief peace arrangements, but began moving upward again as negotiations faltered. On August 17, the two countries missed a 60-day diplomatic deadline for ending the war after failing to agree on Iran’s nuclear program. President Donald Trump also said he was not working under a fixed timetable for ending the conflict. “I have no time schedule. I’m not in a hurry,” he told Fox News.
Higher Fuel Costs Add Pressure on Us Households
The effect of elevated gasoline prices has extended beyond daily trips to the pump. According to the congressional Joint Economic Committee, Americans had spent an additional $56.4 billion on higher gasoline prices during the first six months of the war, equal to about $477 more per household.
The committee’s July report used AAA data to calculate the added cost. The figures came as many households were already reporting difficulty managing basic expenses. A Harris Poll conducted in May found that half of Americans surveyed said they were struggling with the cost of groceries and gasoline, while a large majority said they believed the country was experiencing an affordability crisis.
Inflation eased in July as energy prices cooled, according to The Guardian, but consumer prices remained higher than they were a year earlier. Gasoline prices have since moved upward again.
Oil producers, meanwhile, reported large profits during the first full financial quarter after the conflict began. Aramco, BP, Shell, Equinor, TotalEnergies, Eni, Chevron and ExxonMobil together recorded $90 billion in profits between March and June, according to figures reported by The Guardian. That amounted to roughly $700,000 in profit per minute during the quarter.
