The national average price of regular gasoline has risen to $3.981 as of March 26, up 10 cents from the previous week and $1.00 from February, according to a report from AAA Fuel Prices. This increase comes amid heightened oil prices following the U.S.-Israeli conflict with Iran. A year ago, the average price was $3.150, marking a 33% increase since February.
Economists warn that higher gasoline prices could offset larger tax refunds expected this season. A March 18 analysis from the Stanford Institute for Economic Policy Research projected that if the Strait of Hormuz were closed for three weeks, retail gasoline prices could peak at $4.36 per gallon by May. Under this scenario, the average U.S. household could pay $740 more for gas through the end of the year, potentially wiping out most or all of the larger tax refunds.
Goldman Sachs upgraded its oil price forecasts on March 22, estimating March through April Brent crude oil averages at $110 per barrel. However, the firm noted that U.S. military action could end at any point, reducing the risk premium in global crude and refined product prices. Oxford Economics estimated that if gas prices averaged $3.60 per gallon in 2026, consumer spending on fuel could offset the boost from refunds.
Oil markets are assuming the Iran conflict will end quickly, leading to stabilization. Experts suggest that the longer the conflict lasts, the more it could impact consumer spending and economic conditions.