North America Brief: US Gas Hits $4/Gallon as Dow Surges 1,100 on Peace Hopes
US gas hits $4.02/gal. Dow surges 1,100 on peace hopes. Moody's puts recession odds at 49%. National diesel clears $5. Brent posts record 51% monthly surge.
Gas just crossed $4 a gallon. The Dow just had its best day in 10 months. Oil is above $100. And Trump says the US will leave Iran in two to three weeks. March 31 was a day of stark contradictions — the worst quarterly stock performance in nearly four years, ending on a massive rally built on hope that the war might actually end.
Commodity snapshot (as of March 31)
- US gas (national avg): $4.02/gallon (AAA) — first time since August 2022
- California gas: $5.88/gallon regular; diesel $7.26/gallon
- US diesel (national avg): above $5.00/gallon
- Brent crude: $105.13/barrel (peaked at $126 during the crisis)
- WTI crude: $101.38/barrel
- Brent monthly surge: +51% — largest on record dating to 1988
Gas crosses $4/gallon
The national average for regular gasoline hit $4.02 per gallon on March 31 (AAA data), the first time since August 2022. That is a 35% increase — roughly $1.04 more per gallon — since the war began on February 28. California leads at $5.88 for regular, with diesel at a stunning $7.26. A dozen states have surpassed $4, with 19 others approaching at $3.75+. New York City stations have posted prices above $7 at some locations. National diesel has cleared $5.00, cascading through the trucking and logistics chain — USPS temporarily raised shipping prices 8% on March 26 due to fuel costs. Long-haul truckers are rejecting unprofitable routes. Trump told other countries to "go get your own oil" from the strait, signaling the US may not view reopening Hormuz as its sole responsibility.
Dow surges 1,100 points on peace hopes
Wall Street soared on March 31, with the Dow jumping over 1,100 points — its best day since May 2025. The S&P 500 and Nasdaq also rallied sharply after Trump said the US could end its military campaign in two to three weeks and announced a national address for Wednesday evening. Big-tech leaders surged on the news. However, the rally capped the worst quarterly performance for major indexes in nearly four years. Oil retreated from above $115 to $105 but remains far above pre-war levels. Investors are betting on a resolution — but Iran has rejected US proposals and submitted counter-demands.
WTI settles above $100 for first time since 2022
US oil settled above $100 per barrel for the first time since 2022, with Brent posting a 51% monthly gain — the largest single-month surge on record, surpassing the 46% jump after Iraq invaded Kuwait in 1990. Reuters polls show analysts have increased their annual price forecasts by the most in poll records. Even in optimistic scenarios where the strait reopens soon, analysts say a permanent risk premium has been baked into oil prices. Goldman Sachs has raised forecasts for a sustained period above $100.
Recession risk climbs above 40%
Moody's puts US recession probability at 49%. Multiple Wall Street firms now estimate 40%+ odds. The Fed held rates steady at 3.5-3.75% on March 18, with Chair Powell admitting "nobody knows" regarding the war's economic effects. By March 27, futures markets shifted to a 52% probability the Fed's next move would be a rate hike — the first time that has crossed 50%. The household saving rate has fallen to 4%. Analysts warn that oil at $120-130 per barrel for a sustained period would likely trigger a full recession. Stratas Advisors warned on March 31 that if Hormuz stays closed another month with no signs of resolution, Brent could move toward $190.
Worst quarter in four years
Despite Tuesday's rally, major indexes posted their worst quarterly performance in nearly four years. The S&P 500, Dow, and Nasdaq all finished Q1 2026 deeply in the red. The war consumed the quarter — from the initial shock in late February to the sustained oil crisis throughout March. Business Insider reported that between TSA chaos and rapidly rising gas prices, March sent America's economic outlook into a spiral. Mortgage rates have risen alongside Treasury yields. Consumer confidence has cratered.
Spring planting under cost pressure
Urea prices spiked close to 30% when Iran shut down Hormuz shipping. Nearly 50% of global urea and sulfur exports and almost a third of ammonia supply normally transit the strait — and unlike oil, there are no internationally coordinated strategic fertilizer reserves. Fifty-four agricultural groups wrote to President Trump calling for "much-needed market relief for America's farmers." One farmer told NPR: "You can't afford to cut back too much. You can't afford to have a crummy crop." The Pentagon is estimated to be spending as much as $2 billion per day on the war, while Congress rejected war powers resolutions to limit Trump's authority.
Canada: diesel hits C$2.56/litre in PEI
Canadian fuel prices are surging with dramatic overnight spikes. Prince Edward Island saw regular gasoline rise to C$1.95 per litre and diesel surge to C$2.56 per litre. While Canada is somewhat insulated by domestic oil production, gasoline is priced on global markets and the increases are hitting consumers hard. Alberta may see provincial revenue boosts from higher oil prices, creating a complex economic picture where one province benefits while others bleed.
What to watch
Trump's Wednesday national address could be the turning point — or another false start. Pakistan is set to host US-Iran talks. But Hegseth's comment that reopening the strait is "not just a US problem set" suggests the US may withdraw without reopening Hormuz, leaving Europe and Asia to deal with the ongoing blockade. If that happens, $4 gas may be the floor, not the ceiling. The SPR continues to deplete at unsustainable rates, and the EIA still does not project gas below $3 until after 2027.
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