Why Gas Prices Are Rising So Fast in 2026
Gas has jumped nearly $1 per gallon in three weeks. Here's the direct connection between Iran's Hormuz closure, the 15-million-barrel daily shortfall, and the price you're paying at the pump.
If you've noticed the numbers climbing at your local gas station over the past three weeks, you're not imagining it. The national average in the US hit $3.92 per gallon as of March 20 — up 29 cents in a single week and nearly $1 since late February. In Australia, petrol has breached $2.20 per litre. In Europe, the picture is even worse.
The cause is a single narrow waterway 12,000 kilometres from most of us: the Strait of Hormuz.
The math behind the price spike
Before the Iran conflict began on February 28, Brent crude oil was trading below $70 per barrel. Three weeks later, it's above $106 — a surge of more than 50%.
Why? Because the Strait of Hormuz carries approximately 20 million barrels of oil per day. With the strait effectively closed, Saudi Arabia and the UAE have been diverting some oil via pipelines to the Red Sea and Arabian Sea. But these pipelines can handle about 5 million barrels daily. That leaves a 15-million-barrel hole in global supply — every single day.
The world's strategic petroleum reserves are being tapped. The 32 countries in the International Energy Agency agreed to release 400 million barrels. But at 15 million barrels per day of lost supply, that buys roughly 26 days of buffer.
Why can't OPEC just produce more?
In normal times, OPEC countries hold back production capacity precisely for emergencies like this. Saudi Arabia and the UAE have the world's largest spare capacity — production they could turn on quickly.
The problem: that spare capacity is on the wrong side of the Strait of Hormuz. Even if Saudi Arabia pumped at full capacity, much of that oil can't reach global markets because the shipping route is closed.
Saudi Arabia's East-West Pipeline can move about 7 million barrels per day to the Red Sea port of Yanbu. The UAE's Fujairah pipeline adds some more. But terminal infrastructure limits actual throughput, and these routes can't replace the full volume that normally transits the strait.
How crude oil becomes expensive petrol
The connection between crude oil prices and what you pay at the pump isn't instant, but it's direct:
Crude oil accounts for roughly 50-60% of the final retail price of petrol. When Brent crude jumps from $70 to $106, that's a $36 per barrel increase. A barrel of crude produces about 45 litres of petrol. So the crude cost alone adds roughly $0.80 per litre — or about $3 per US gallon.
Refineries typically pass through crude price changes within 1-2 weeks. That's why you're seeing the pump price lag slightly behind the headline crude numbers. The worst is likely still ahead.
When will prices come down?
There's no simple answer, because it depends on when — or if — the Strait of Hormuz reopens to commercial shipping.
Some analysts are cautiously optimistic. Iran has continued to ship its own oil to China through the strait, and several Indian and Saudi vessels have been allowed through. This suggests Iran is using the strait selectively rather than attempting a total blockade.
Others point out that war-risk insurance premiums have made transit economically unviable for most commercial ships, even if Iran technically allows passage. Insurance providers have a 72-hour cancellation clause, and premiums have quadrupled.
As long as insurance markets consider the strait too risky, most shipping companies won't send their vessels through it — regardless of what Iran says. The strait could be "technically open" while remaining "commercially closed" for months.
What you can do now
Track real-time commodity prices on the ShelfShock live dashboard to understand how global oil markets are translating to your local costs. The dashboard shows Brent crude, WTI, and 9 other commodities updated from market data.
If you're planning a long drive or road trip, consider that prices may continue climbing for another 2-4 weeks before stabilising. Fill up when you can at current prices — they may look cheap in hindsight.