March 27, 2026 — CBS News
The military confrontation with Iran has driven up crude oil and gasoline prices, straining budgets for U.S. drivers, delivery workers, farmers and the U.S. Postal Service. Analysts warn prices will likely stay elevated until commercial shipping through the Strait of Hormuz — the chokepoint linking the Persian Gulf and the Gulf of Oman that carries about one-fifth of the world’s oil — returns to normal.
While California typically pays more at the pump because it imports more oil and has higher gasoline taxes, the recent increases have been felt across the country. Diesel costs, which affect trucks, barges and freight trains that move goods nationwide, have climbed faster than regular gasoline. Part of that acceleration reflects a diesel supply that was already tight before the conflict began.
According to the U.S. Energy Information Administration, roughly half the price of a gallon of gasoline is driven by the cost of crude oil; the remainder comes from refining, taxes and marketing. Seasonal demand also plays a role, with consumption tending to rise in warmer months. The United States is currently the world’s top oil producer, but global market dynamics determine commodity prices, so higher crude costs overseas translate into higher retail fuel prices here at home.
Rising energy costs are not limited to vehicle fuel. Residential heating oil prices have started to increase, which could raise winter heating bills for some households.
The jump in fuel prices is already affecting food delivery drivers and farmers, who face higher operating costs that can eat into earnings and raise prices for consumers. The situation remains fluid as officials monitor shipping lanes, regional tensions and global oil market responses.
Edited by Aimee Picchi
Topics: Gas Prices; Oil and Gas