Iran Conflict Drives Gas Prices to Record High on Labor Day

Gas prices hit an all-time high on Labor Day, with the national average reaching $4.15 per gallon. This is a significant increase from last year's price of $3.19 per gallon and even surpasses the previous Labor Day record set in 2012 at $3.82 per gallon.

The main driver behind these high prices is the ongoing conflict involving Iran, which has disrupted oil shipments through the Strait of Hormuz. As a result, crude oil prices have climbed back into the $90-a-barrel range, making gasoline more expensive for consumers.

Gasoline inventories have also tightened, with U.S. supplies declining to 205.7 million barrels while demand slipped to 8.92 million barrels per day. Additionally, refineries are running at nearly full capacity, leaving little room for quick increases in fuel production if supplies are disrupted.

The impact of these high prices is being felt across the country, with some states experiencing significantly higher average prices than others. For example, drivers in California are paying an average of $5.78 per gallon, while those in Indiana are paying just $3.44 per gallon.