March 27, 2026 / 1:59 PM EDT / CBS News
The war with Iran is pushing up oil and gas prices, creating widespread financial strain on U.S. motorists, food delivery drivers, farmers and the U.S. Postal Service. Analysts say prices are likely to remain elevated until shipping resumes in the Strait of Hormuz, a key waterway between the Persian Gulf and the Gulf of Oman through which one-fifth of the world’s oil supply flows.
Gas prices are typically higher in California, which relies heavily on oil imports and has higher gasoline taxes, but prices have increased nationwide. Diesel, which powers trucks, boats and trains that transport U.S. goods, has risen more quickly than regular gasoline, in part because diesel was already in short supply before the war began.
Oil accounts for about half the cost of a gallon of gas; the rest is refining, taxes and marketing, according to the U.S. Energy Information Administration. Seasonal demand also influences prices, with demand for fuel rising during warmer months. The U.S. is the world’s leading oil producer, but the global market sets the price, so higher oil costs translate into higher pump prices for Americans.
It’s not just gasoline: residential heating oil prices have begun to climb in response to the conflict, potentially raising heating bills for households.
High gas prices are already impacting delivery drivers and farmers (video: “High gas prices impact food delivery drivers, farmers” — 02:08).
Edited by Aimee Picchi
In: Gas Prices; Oil and Gas
