Why U.S. gas prices jumped despite limited Middle East oil imports

Gasoline prices raced higher across the United States this spring, even as American officials stressed the country’s limited reliance on Middle Eastern oil. The national average for regular hit $4.16 on April 8, up from $3.45 a month earlier and under $3 at the start of the year, according to AAA.

In an April 1 address, President Donald Trump said the Iran war and the contest over the Strait of Hormuz should have little effect on U.S. fuel costs. “The United States imports almost no oil through the Hormuz Strait and won’t be taking any in the future,” he said.

“We don’t need it. We haven’t needed it and we don’t need it.” It is true the U.S. is less dependent on foreign crude than in the past, and only about 8% of oil imports come from the Middle East. The puzzle for drivers is why pump prices still surged. Economists say the answer is simple: oil is priced in a global market.

“It’s a global market,” said Mark Zandi, chief economist at Moody’s Analytics, noting that crude flows to wherever buyers pay the most. When the United States began airstrikes against Iran, crude benchmarks jumped worldwide as traders braced for supply risks. West Texas Intermediate climbed from about $67 on February 27 to roughly $105 on March 30.

Prices spiked because the conflict constrained regional supply—through the closure of the Strait of Hormuz, heightened dangers to shipping and collateral damage to energy infrastructure—threatening deliveries to parts of Asia and Europe that rely heavily on Middle Eastern crude.

That global squeeze lifted prices everywhere, including in the U.S. “Everybody’s competing for the same barrel of oil,” said James Cox of Harris Financial Group. “It doesn’t matter whether it’s produced in Texas or Iran or Saudi Arabia or Russia.” The United States now produces more than 13 million barrels of crude a day and exports more oil than it imports.

Still, Americans consume vast quantities of petroleum and bring in around 6 million barrels per day, only a small fraction of it from the Persian Gulf. Domestic producers also sell into international markets. “We produce as much as we consume,” Zandi said. “But at the end of the day, the producers here are going to sell to whoever can give them the highest prices, as well.” The impact has been uneven across the country.

The West Coast is especially exposed because a larger share of its crude comes from the Middle East. That helps explain why prices climbed to $5.93 a gallon in California, said Kate Gordon, CEO of California Forward. “We get nothing from east of the Rockies,” she said.

There was a brief respite on April 8, when oil prices fell on news of a fragile ceasefire. Gas prices may follow, though not necessarily back to early-year levels. “If the conflict stops and it has a kind of meaningful end to it, I would expect oil prices to fall relatively quickly,” said Jason Schenker, president of Prestige Economics, speaking before the ceasefire.

“I do not think they’re going to go all the way down to where they were.” Despite the anxiety, the Iran war did not produce a U.S. gasoline shortage. Lines formed at some stations, but many were driven by bargain-hunters at discount retailers. It’s a far cry from the oil crisis of the 1970s, which triggered rationing.

For now, experts emphasize that as long as global supply is at risk, American drivers will feel it at the pump—even if little of their gas started in the Middle East.