Gas prices top $4 a gallon in the US national average for the first time since late May, with a renewed round of US-Iran strikes stoking fears that fighting could block oil flows through the Strait of Hormuz, the waterway that carries roughly a quarter of the world’s seaborne oil.
The national average reached $4.003 a gallon on Monday, around 13 cents higher than the week before. By 23 July, AAA reported the average had climbed a further 15 cents week-on-week to $4.09, with most states at or above $4, as crude oil pushed into the $90-a-barrel range driven by volatility around the strait.
Benchmark Brent crude surged as much as 4% to breach $90 a barrel in early Monday trading before paring gains, last trading around 0.5% higher at $88.50. West Texas Intermediate was 0.2% lower at $82.31 a barrel.
CNBC reported that on 28 July, US Central Command said American forces had intercepted an Iranian attack, after which WTI futures rose 4.4% to $82.73 a barrel. Goldman Sachs warned in a note cited by CNBC that disagreements over the Strait of Hormuz ‘could see hostilities reignite,’ even as a pause in fighting had ‘weakened expectations that the conflict will escalate to include significant attacks on civilian and energy infrastructure.’
Why Gas Prices Top $4 Again and What Could Come Next
Vishnu Varathan, Asia Pacific head of macro strategy at Mizuho, wrote that ‘two-way US-Iran retaliatory strikes not only torpedo the interim truce deal but are a serious escalation, from a skirmish into a full-blown conflict.’ He added that the market may still be underestimating the risks, citing severe disruption to Hormuz shipping, renewed sanctions on Iranian crude, and the threat of broader attacks on regional oil infrastructure. Higher shipping and insurance costs alone could make the delivered cost of oil $10 to $15 a barrel more expensive, he said.
Jan Hatzius, Goldman Sachs’ chief economist, wrote in a Sunday note that while prices could fall quickly if the escalation subsides, ‘more attacks on tankers and Middle East infrastructure could push prices back to the $100+ range.’ Goldman now sees more upside risk in its forecast for Brent to average $80 a barrel in the fourth quarter of 2026 and $75 in 2027.
A Goldman Sachs research note published on 11 May 2026 had set out four Brent scenarios tied to Hormuz closure duration. The baseline case assumed flows recovering by end-June, with Brent at $100 in the April-May window and $90 in the fourth quarter. An adverse case, with flows recovering by end-July, put Brent at $125 in May and $100 in the fourth quarter. A severely adverse scenario involving production scarring saw Brent reaching $145 in May and $120 in the fourth quarter. A benign outcome, with flows back by mid-June, put Brent at $80 in the fourth quarter. AdvisorAnalyst’s summary of the note quoted Hatzius as saying the risks were ’tilted toward more adverse outcomes, higher oil prices, and greater economic damage.’
The Journey from $2.98 to Four Dollars a Gallon
The pace of the run-up in pump prices has been steep. KBB reported that the national average rose from $2.98 a gallon on 26 February 2026 to $4.08 by 2 April. Prices then climbed further, reaching $4.56 at Memorial Day weekend on 21 May, AAA reported, the highest Memorial Day price in four years.
From that peak, pump prices fell for three consecutive weeks, dropping to $4.12 by 11 June, aided by crude remaining below $100, according to AAA. Brent crude itself had topped $126 a barrel in late April before retreating as strategic stock releases and weaker demand eased market tightness. Prices fell further after the US and Iran announced an interim agreement intended to halt hostilities and reopen the strait, the agreement that has since unravelled.
BloombergNEF had estimated that absent any Iranian market disruption, Brent would have averaged around $55 a barrel in 2026. The energy research firm, which identified Iran as the fifth largest crude producer in OPEC+, pumping roughly 3.3 million barrels per day, modelled Brent averaging as high as $91 a barrel in the fourth quarter under an extreme scenario in which Iranian exports were completely removed from the start of February.
Goldman’s updated call for Brent to hit $80 by year-end rests on Hormuz fully reopening in the fourth quarter. With the strait still contested and gas prices top of mind for consumers already paying above $4, the next diplomatic or military development in the Gulf will carry outsize weight for oil markets.