Fuel Price Surge Echoes 2022 Spike, But Economic Impact Could Last Longer

Fuel prices continue to be volatile following the recent war between the US and its allies and Iran, echoing a similar spike in 2022. However, this time around, economists warn that high fuel prices may pose increasing risks to the U.S. economy as they persist for longer.

The current conflict has disrupted supplies of crude oil and diesel, driving up fuel prices globally. In February, major powers attacked smaller countries, anticipating swift victories, but fighting disrupted energy supplies and led to price surges in 2022 during Russia's invasion of Ukraine and again in 2026 following the US-Israel attack on Iran.

Gasoline prices remain lower than their 2022 record highs, averaging $4.48 a gallon as of Monday, down from June 14, 2022's peak of $5.02, according to AAA data. Despite this, the current crisis is harder on household budgets, with economists warning that high fuel prices have stoked inflation and forced the Federal Reserve to raise interest rates.

The average price of gas had fallen steadily since its summer peak in 2022, reaching $3.68 by the same point in the conflict. In contrast, current prices have risen every day for two weeks and are approaching their 2026 high of $4.51.