‘It’s horrible’: Consumers rocked by gasoline spike as Iran war broadens

As he fueled up Monday at a Casey’s gas station in Naperville, Nick Harris quantified the impact of a 50-cent spike in a gallon of regular within a week.

“It’s crazy,” said Harris, who works for DoorDash. “It has a huge impact on my income. It’s difficult to make ends meet with this, as well as groceries being so expensive.”

Other drivers shared his angst amid surging oil prices following U.S. and Israeli attacks on Iran that started Feb. 28.

Gas at Casey’s was $3.64 a gallon, a bargain compared to other stations in Naperville charging $3.79 or over $4.19 at a Hoffman Estates BP.

“These prices are ridiculous,” said Andriana Lawrence, who works in Naperville. “My pockets are a lot tighter these days.”

In the Chicago region, a gallon of regular gas rose by 50 cents in seven days, jumping from an average of $3.19 a week ago to $3.69 Monday, AAA reported, causing consumer nostalgia.

“I loved that price. I wanted to keep it there,” Lawrence said.

“Oh my goodness, I cannot believe it,” motorist Kimmie Takumyo said. “It’s horrible.”

Nationwide, a gallon of regular gas averaged nearly $3.48 Monday compared to $3 on March 2.

Along with the global crisis, there are run-of-the-mill increases as winter-blend gasoline gives way to the pricier summer blend. And costs tick up in anticipation of spring break travel, AAA spokesperson Molly Hart explained.

“Refineries also go into seasonal maintenance so they might not be producing at full capacity,” also impacting costs, she said.

The last time fuel surged so suddenly was in March 2022, after Russia invaded Ukraine, when the national average for a gallon of regular jumped by 60 cents, Hart noted.

“After about a week, it stabilized and kept on going up incrementally” until peaking in June 2022 at $5 a gallon, Hart said.

Hopes that fuel costs would regulate faded quickly last week, as the U.S. and Israel continued strikes on Iran, which responded with missiles impacting neighboring Persian Gulf nations.

Fears of attacks have all but stopped tanker traffic in the Strait of Hormuz, a waterway off Iran’s coast that accommodates a fifth of the world’s oil.

Major oil producers in the region like Iraq and Kuwait have cut production because they are running out of storage space due to export constraints. Iran, Israel and the U.S. have all struck oil and gas facilities since the war started, worsening supply concerns.

“We need the Strait of Hormuz to open,” GasBuddy petroleum analyst Matt McClain said. “Any time that you remove 20% of anything (from) bananas (to) beef out of the production supply chain across the globe, you’re going to have a price increase.”

When will consumers get relief? “It’s an open conflict — we don’t know where the next missile is going to land,” McClain said.

It’s possible gas could reach $5 a gallon, he noted. “But there’s also an equal number of scenarios where we could see the price point level off or even potentially fall.”

McClain predicted collateral damage to the economy as diesel fuel skyrockets.

As trucking becomes more expensive, “you’re going to run into shipping cost increases,” he said. “That’s going to impact groceries,” particularly fresh produce, meat and dairy — and to a lesser extent, commodities like clothing.

Global impact

The price of Brent crude, the international benchmark, briefly surged to $119.50 per barrel on Monday — its highest level since the summer after Russia invaded Ukraine. West Texas Intermediate, which is produced in the U.S., also soared to $119.48 per barrel at one point.

Those prices fell under the $100 mark later Monday. But that's still much higher than the roughly $70 a barrel crude was selling for before the Iran conflagration began.

The conflict, now in its second week, is ensnaring countries and infrastructure critical to the production and transportation of oil and gas worldwide. And there's no end in sight. On Monday, Iran named Ayatollah Mojtaba Khamenei to succeed his late father as supreme leader — a new sign of defiance from the country's leaders as the U.S. and Israel continue heavy bombardment.

Group of Seven economic leaders met Monday to discuss the war but fell short of reaching an agreement to contain soaring oil prices.

G7 leaders opted to hold off on tapping emergency oil reserves but signaled they may soon release that crude into the marketplace. Their meeting appeared to help calm stock markets, which by Monday afternoon recovered some of their early losses.

“We’re not there yet,” French Finance Minister Roland Lescure told reporters in Brussels after the meeting.

· Daily Herald wire services contributed to this report.