Gas Prices Soar as Iran Ceasefire Ends, Experts Warn Higher Costs Ahead

The expiration of the ceasefire with Iran has led to an increase in US gas prices, which may continue to rise due to supply pressures. President Donald Trump stated that no talks are taking place with Iran to extend the ceasefire, which had a 60-day deadline pass on August 17. The average price of gasoline nationally is at $4.02 per gallon, up 7.7 cents from the previous week and 93.1 cents higher than a year ago, according to GasBuddy data as of August 17.

Greg Upton, executive director and associate research professor at the Center for Energy Studies at Louisiana State University, said that upward pressure may continue on gasoline and diesel prices due to the continued closure of the Strait of Hormuz and ongoing Ukrainian attacks on Russian oil refineries. Patrick De Haan, head of petroleum analysis at GasBuddy, noted that seasonal transition to cheaper winter-blend gasoline in the coming month could bring some relief, but 'the two dominant challenges facing motorists, the closed Strait and the ongoing refinery strikes, show no signs of resolving anytime soon.'

Shikha Jain, a Simon-Kucher partner and lead of the consumer sector for North America, said that higher gas prices can have trickle-down effects on many other categories, including grocery store items and products with delivery fees or shipping. Consumers are starting to trade down in products as prices increase, she added.