As gasoline prices across the United States have risen significantly within just a few days, ordinary Americans are increasingly complaining about fuel costs. Some have joked that if prices continue to climb, switching to an electric vehicle might be a better option.
In New York, gas station prices have increased by approximately 30 cents per gallon over the past week, with diesel prices rising even more sharply—by around 70 cents. Anthony, a rideshare driver from New Jersey, admitted that he earned less this week due to the price surge, with no additional subsidies from the platform. An international student in the northeastern U.S. mentioned that, given the rising trend in gasoline and jet fuel prices, they are considering staying home during spring break.
According to Matt McClain, an analyst at fuel price tracking firm GasBuddy, gasoline prices are rising rapidly nationwide, with 42 states now seeing prices above $3 per gallon. He noted that nearly 100% of this week’s increase is due to geopolitical shocks rather than seasonal demand increases.
What worries the public more is that no one knows how long the conflict will last or how it will end. Steve Hanke, an applied economics professor at Johns Hopkins University, publicly stated on social media that the Middle East conflict is effectively "a tax on ordinary Americans." Brent crude oil prices rose about 28% over the week, marking the largest weekly increase since April 2020. U.S. crude oil prices surged from around $67 before the conflict to over $107.
Both consumers and investors are bracing for another unsettling week.
As gasoline prices continue to rise, many Americans are recalculating their commuting expenses. On social media platforms like Reddit, users have started threads asking, "How much is gas where you are?" Many reported overnight price jumps. One user wrote, "The gas price near my college went up 30 cents overnight—I'm still upset about it... looks like I'll be walking to class this week." Electric vehicle owners responded with pride, saying they hadn’t even noticed the price increase, while others praised their Teslas as increasingly attractive investments.
On Twitter, one user remarked, "I'm curious to see how high oil and gas prices will push EV sales. Keep burning Middle Eastern oil, folks—sooner or later you'll realize there's a better option. Not to mention the environmental benefits. Even purely economically, EVs are the smarter choice." Another user commented, "At this rate, we'll all end up biking everywhere like Europeans."
GasBuddy analyst Matt McClain explained that although the U.S. does not face an oil supply shortage, crude oil is priced globally, leaving the country vulnerable to price shocks. The national average gasoline price has risen 45 cents per gallon compared to a week ago, roughly equivalent to an additional $175 million in daily fuel expenses. The firm predicts that, following another surge in crude prices on Sunday evening, wholesalers and refiners may implement rare intraday price hikes starting Monday morning, passing increased costs on to consumers. This could trigger a second wave of price increases, with an 80% likelihood that the national average will reach $4 per gallon within the next month.
Diesel prices are rising even faster and are expected to soon hit $5 per gallon. According to GasBuddy’s research report, key drivers of the rapid price increases include drone attacks on Saudi refineries, Qatar’s shutdown of natural gas production, and declining U.S. inventories amid cold weather.
"U.S. consumers are highly price-sensitive right now. Over the past few years, inflation has affected nearly every aspect of living costs," McClain said. "Next week, the market’s focus will remain on the Middle East—any escalation in risks could push oil prices even higher."
The Strait of Hormuz, a narrow channel between Iran and Oman connecting the Persian Gulf and the Gulf of Oman, typically sees 20 to 25 million barrels of crude oil and petroleum products transported daily. However, following multiple attacks on commercial vessels, traffic through the strait has nearly halted. Vast quantities of crude oil are stranded in the Middle East with nowhere to go. Gulf oil exporters such as Iraq, Qatar, and Kuwait have announced forced production cuts.
Former U.S. President Donald Trump and Treasury officials attempted to reassure markets, with Trump promising naval escorts and insurance for oil tankers and Treasury officials pledging measures to stabilize energy prices. Oil prices saw a slight midweek dip as a result. However, as of March 8, traffic through the Strait of Hormuz remained minimal, effectively at a standstill. A March 6 report from Goldman Sachs’ commodities team indicated that if the strait remains blocked through March, oil prices could surpass historical peaks seen in 2008 and 2022.
Economists are still assessing how much of the crude price increase will filter through to the real U.S. economy. Jane Liu, an assistant professor of economics at the University of Nebraska, noted that sustained sharp increases in energy prices could raise production costs for agriculture and manufacturing.
She explained that crude oil is a key input for agricultural production, and price changes affect cost structures through multiple channels—from transporting agricultural products to upstream inputs like fertilizers. U.S. agriculture is highly mechanized, requiring significant diesel for tractors, harvesters, and transport trucks. Oil and gas prices also influence the cost of agricultural inputs like fertilizers. If energy prices continue to rise sharply, agricultural costs could increase, squeezing profit margins.
Matthew Erickson, a Nebraska crop farmer, told media that after years of thin profits, his family has turned to diversification to manage uncertainty. "Besides farming, we’ve recently started raising chickens," he said.
Liu also suggested that if large-scale, sustained oil price increases lead to inflationary pressures, they could influence future interest rate adjustments. However, when asked whether rising oil prices might drag the U.S. economy into a recession, she said it is too early to tell, given the economy’s current resilience.
While economists evaluate these transmission channels, Wall Street traders and retail investors are already seeking new opportunities amid the turmoil. Paradoxically, although geopolitical conflicts typically drive capital into safe-haven assets like U.S. Treasuries, the 10-year Treasury yield has edged higher this time.
Steve Sosnick, chief strategist at Interactive Brokers, attributed the rise in yields to market concerns about inflationary pressures from higher oil prices. He noted that as energy prices climb, market expectations for the Federal Reserve’s first interest rate cut have shifted from summer to fall. According to CME Group Inc futures data, investors now see less than a 50% chance of two or more rate cuts by 2026—down sharply from 79% the previous weekend.
Other analysts pointed out that with the U.S. government continuously expanding debt issuance, Treasury supply has increased significantly. Even during risk events, markets may not rush into bonds as they once did.
In contrast to the bond market, tech stocks have shown resilience. Large technology companies focused on artificial intelligence remain among the most concentrated sectors for capital inflows. "We repeatedly see investors buy the dip whenever tech stocks fall," Sosnick said. Earlier this year, SaaS stocks like Salesforce and Crowdstrike—which had plunged amid concerns that AI would disrupt software—recovered somewhat during market volatility. Some retail investors who bought in late February have grown more confident in short-term trading.
Still, tech companies are not entirely insulated from the conflict. Iranian media reported that two Amazon Web Services data centers in the UAE and one facility in Bahrain were damaged in drone attacks. Subsequent checks of AWS service status showed multiple disruptions following the March 3 incident.
When asked why incidents like the AWS data center attacks haven’t sparked investor concern, Sosnick explained that Middle East data center operations still represent a relatively small portion of revenue for major U.S. tech firms.
A more significant reason, Sosnick summarized, is that markets remain in an "optimistic" mood—believing "this too shall pass." While volatility has increased, it is far from panic levels. The prevailing expectation in U.S. equity markets is that the impact of the Middle East conflict on global energy supplies and tech company earnings will be short-lived and limited.
Wall Street has also taken note of retail investors’ apparent indifference to the Middle East situation. On the first trading day after U.S. strikes on Iran, U.S. stocks initially fell, but a J.P. Morgan report later noted that individual investors poured $2.2 billion into stocks and ETFs, effectively providing market support.
"Historically, conflicts in the Middle East have often lasted longer than initially expected, which does concern me to some extent," Sosnick admitted. "Whether the situation can be contained quickly remains very uncertain at this point."
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