Global Economy — 2026-05-05

US Gas Prices Jump as Strait of Hormuz Disruption Drives Fuel Crisis Into Consumer Markets

The national average gasoline price reached $4.46 per gallon Monday, up 38 cents over the prior week, with diesel averaging $5.64, according to AAA and GasBuddy. Great Lakes states including Michigan, Indiana, Ohio, and Illinois posted the sharpest regional spikes, with diesel touching $6 per gallon in some areas; GasBuddy's Patrick De Haan cited refinery outages as the primary driver. States Newsroom reported Brent crude rose to $114.90 per barrel Monday, a jump it described as the second-largest since 2022. Trump on Sunday announced "Project Freedom," a Navy-escort operation through the Strait of Hormuz; CENTCOM confirmed two US-flagged ships transited Monday, while the IRGC called the claim "baseless and completely false" and warned further vessels "will face serious risks."

Analysis
The market is pricing Hormuz transit risk and domestic refinery outages as simultaneous rather than sequential shocks, corroborated across three outlets, which is why the price move tracks faster than either driver alone explains. Trump's "Project Freedom" escort operation bets demonstrated transit capability will restore shipper confidence before prices reach political crisis levels. Tehran's explicit threat against additional vessels signals the IRGC intends to test that commitment at sea. Prices nationally exceeding $5.00 within 60 days is unlikely. Sustaining the current weekly rate through mid-July requires both the refinery disruptions and Hormuz freeze to persist. If domestic refining capacity recovers, prices stabilize regardless of Hormuz.

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