US Oil Prices Set for Continued Volatility as Iran Conflict Drags Into Its Third Week

The Iran war is showing no signs of ending, and US oil prices are set for more volatility Monday, with analysts forecasting pump prices in the $3.80 to $3.85 range per gallon. Energy expert Patrick De Haan has said the $4 threshold remains possible but not yet imminent, even as the cumulative effect of three weeks of military conflict continues to drive prices higher. The situation has emerged as a major economic concern for American consumers and businesses alike.
The price escalation began on February 28 with the opening salvos of the US-Israel campaign against Iran, a military operation that has progressively disrupted oil infrastructure and shipping routes across the region. From below $3 per gallon before the first strikes, the national average has climbed 23% to $3.70. Analysts say each week of continued fighting risks embedding these higher prices as the new baseline.
Friday’s US assault on Kharg Island, where significant portions of Iran’s crude oil are processed before export, added fresh intensity to the supply crisis. Iran’s ongoing blockade of the Strait of Hormuz has cut off about 20% of the world’s oil from global markets. Brent crude hovered between $103 and $106 on Monday, while US crude settled near $94 following a brief surge to $100 on Sunday.
California consumers are bearing the heaviest financial burden, with state averages above $5 per gallon and some Los Angeles areas recording prices over $8. Diesel for trucks and freight trains could reach $5.05 to $5.15 nationally. Senior executives from major US oil companies including Exxon, Chevron, and ConocoPhillips have briefed White House officials on the growing risk of supply shortfalls, with Exxon’s CEO Darren Woods also raising the alarm about market manipulation by speculators.
Wall Street responded to Monday’s temporary oil price dip with cautious optimism, as the S&P 500 gained roughly 1% in early trading. Oil company shares have surged to historic highs since the start of the conflict, even as consumer confidence erodes. Whether the market gains can hold will depend largely on developments at the Strait of Hormuz and in the war theater in Iran.