What's Happening
Oil markets jolted higher in early Asian trading on Thursday, July 24, 2026, as Brent crude broke through the $96-per-barrel threshold — its highest level in more than six weeks — following a 12th consecutive night of U.S. military strikes against Iran. West Texas Intermediate (WTI), the U.S. benchmark that most directly influences domestic gas prices today, climbed in tandem, pushing above $92 per barrel as traders priced in an escalating geopolitical risk premium that shows no sign of retreating.
The move represents a significant acceleration from where both benchmarks were trading just two weeks ago. Brent had been hovering in the $84–$87 range through early July before the military campaign began, meaning the market has added roughly $9–$12 per barrel in risk premium in under three weeks — a move of approximately 11–14% that is already rippling through wholesale gasoline markets and will reach retail pumps within days, if it hasn't already.
The sustained nature of the strikes — now entering a second consecutive week — is what's rattling traders most. Single-night military actions often produce a brief spike followed by a pullback as markets reassess actual supply disruption. But 12 consecutive nights of strikes signals a prolonged campaign, and oil traders are now pricing in the possibility that Iranian crude exports — which the U.S. Energy Information Administration estimated at roughly 1.5 to 1.7 million barrels per day in recent months — could face meaningful disruption, either through direct infrastructure damage, insurance market withdrawal, or Iranian retaliatory action targeting regional shipping lanes.
The Strait of Hormuz, through which approximately 20% of global oil trade passes daily, remains the central choke point that markets are watching. Any Iranian move to threaten or partially close the strait would send prices dramatically higher, and that tail risk is now being actively priced into futures contracts.
Data Snapshot
As of Thursday morning Asian trading, July 24, 2026, Brent crude was trading above $96 per barrel — a six-week high — while WTI climbed above $92 per barrel, according to market data cited by OilPrice.com. The spread between Brent and WTI held near $4, consistent with recent weeks.
According to AAA, the national average gas price per gallon for regular unleaded had been trending upward ahead of this latest escalation, with the national average price per gallon already reflecting earlier crude gains from the onset of the conflict. The EIA's most recent weekly retail gasoline report showed U.S. regular gasoline averaging in the $3.40–$3.60 range nationally before this latest crude spike — figures that analysts now expect to move higher as the $96 Brent print works through the refining and distribution chain.
EIA petroleum inventory data has shown draws in recent weeks consistent with summer demand season, leaving the U.S. with less of a buffer against supply shocks. OPEC+ is currently producing near its stated quota levels, with the group having already unwound a portion of its voluntary cuts earlier in 2026, leaving limited spare capacity to offset any Iranian supply disruption.
Why It Matters at the Pump
The rule of thumb that energy analysts and the EIA have long cited holds that a $10-per-barrel move in crude oil translates to roughly 24–25 cents per gallon at the retail pump, though the pass-through is rarely perfectly linear and typically takes one to three weeks to fully materialize.
Applying that math to the current move: if Brent has added $9–$12 per barrel since the strikes began, American drivers could be looking at an additional 22–30 cents per gallon at the pump over the coming weeks — on top of whatever the national average gas price was before the conflict escalated. That's a meaningful hit for households already navigating elevated living costs.
Regional impacts will vary significantly. California, which operates under unique reformulated fuel requirements and relies heavily on West Coast refinery output, typically sees the sharpest and fastest response to crude price spikes. California's average price per gallon was already among the nation's highest heading into this event, and the state could see prices approach or exceed $5.00 per gallon at premium stations if crude remains elevated.
The Midwest, which benefits from proximity to Cushing, Oklahoma — the WTI delivery hub — and a dense refinery network, tends to see more muted and delayed retail price responses. Gulf Coast states including Texas and Louisiana similarly benefit from refinery proximity and often lag national averages on the upside.
The Northeast faces a different set of pressures: the region's refinery capacity has been structurally reduced over the past decade, making it more dependent on imported refined products and therefore more exposed to global price shocks. New England states in particular could see above-average price increases as the conflict premium works through the supply chain.
What's Driving This
The primary driver is straightforward: 12 consecutive nights of U.S. military strikes against Iran have injected a sustained geopolitical risk premium into global oil prices that the market cannot easily dismiss or fade.
Iran is a significant oil producer and OPEC member, with production capacity estimated by the EIA at approximately 3.2–3.4 million barrels per day, of which roughly 1.5–1.7 million barrels per day were being exported in recent months despite existing U.S. sanctions. A meaningful disruption to that flow — whether from infrastructure damage, tanker insurance withdrawal, or Iranian government decision to curtail exports as leverage — would remove a non-trivial volume from a global market that OPEC+ has been managing carefully.
Beyond Iran's own production, the Strait of Hormuz risk is the market's deeper fear. The strait handles roughly 17–20 million barrels of oil per day, according to EIA estimates — approximately one-fifth of global petroleum liquids consumption. Iran has previously threatened to close or mine the strait during periods of military tension, and traders are now assigning a higher probability to that scenario than at any point in recent years.
Seasonal demand factors are compounding the pressure. July and August represent peak U.S. gasoline demand season, with the EIA typically recording the highest weekly implied demand figures of the year during this period. Refineries are running hard, and any supply disruption hits a market with less slack than it would have in the shoulder seasons of spring or fall.
OPEC+ spare capacity — the group's traditional shock absorber — is estimated to be concentrated primarily in Saudi Arabia and the UAE, at roughly 2–3 million barrels per day combined. Whether those nations would deploy that capacity to offset an Iranian disruption, and how quickly, remains an open question that markets are actively debating.
Historical Context
To put the current move in perspective: Brent crude at $96 per barrel is elevated but not unprecedented. The benchmark last traded consistently above $90 during the post-pandemic demand surge of 2022, when it briefly touched $139 per barrel in March of that year following Russia's invasion of Ukraine — the highest level since 2008.
The 2022 spike drove U.S. national average gas prices to a record $5.016 per gallon in June 2022, according to AAA data. The current situation, with Brent at $96, is meaningfully below that crisis level in crude terms, which provides some context: the market is pricing in serious risk, but not yet a catastrophic supply disruption.
More recently, Brent had traded in the $70–$85 range through much of 2024 and into 2025 as OPEC+ managed supply carefully against a backdrop of uncertain global demand growth. The move from that range to $96 represents a significant repricing of geopolitical risk.
For U.S. drivers, the comparable retail reference point is the summer 2023 period, when national average gas prices ranged from roughly $3.50 to $3.80 per gallon as crude oil moved in the $70–$90 range. The current crude level above $90 suggests retail prices could push toward or above the upper end of that range nationally, with high-cost states like California potentially seeing significantly higher figures.
Regional Breakdown
California remains the nation's most price-exposed state. The state's unique fuel blend requirements, limited pipeline connectivity to the rest of the U.S., and dependence on a small number of in-state refineries mean that any global supply shock hits California consumers harder and faster. Prices at California pumps could approach $5.00–$5.50 per gallon for regular unleaded if crude remains above $95 for an extended period.
The Pacific Northwest — Oregon and Washington — typically tracks California with a slight lag and similar magnitude, given shared supply infrastructure.
The Midwest, anchored by states like Illinois, Indiana, Ohio, and Michigan, benefits from pipeline access to Cushing and a robust regional refinery network. These states typically see smaller swings and may add 15–20 cents per gallon rather than the 25–30 cents that coastal markets absorb.
Gulf Coast states — Texas, Louisiana, Mississippi, Alabama — are home to the nation's largest refinery concentration and often see the most muted retail price response to crude spikes, as local refinery margins can absorb some of the shock. Texas drivers may see the smallest per-gallon increases of any major state.
The Northeast, particularly New England, faces above-average exposure due to reduced regional refinery capacity and dependence on waterborne imports of refined products. Connecticut, Massachusetts, and New York could see price increases at or above the national average rate of pass-through.
What Experts Are Saying
Analysts across the energy sector are raising near-term price targets in response to the sustained military campaign. EIA projections issued before the current escalation had anticipated Brent averaging in the mid-to-upper $80s through Q3 2026 — a baseline that now looks materially too low if the conflict continues.
Goldman Sachs energy analysts have previously modeled Strait of Hormuz disruption scenarios that could push Brent to $110–$120 per barrel in a severe case, though the bank has also noted that Saudi spare capacity deployment could cap the upside. JPMorgan's commodity desk has flagged the $100 level as a near-term technical and psychological target if strikes continue into a third week.
AAA has noted that sustained crude prices above $90 per barrel historically translate to national average gas prices above $3.75 per gallon, with the exact figure depending on refinery margins and regional distribution costs. GasBuddy analysts have been tracking accelerating wholesale price increases at the rack level — the price refiners charge distributors — which is the leading indicator that retail prices are about to move.
What Drivers Should Expect
The near-term outlook is for continued upward pressure on gas prices at the pump. If U.S. military operations against Iran continue into a third week, crude oil markets are unlikely to give back the risk premium they've built in — and could add more. Drivers should realistically expect the national average gas price to climb 20–35 cents per gallon from pre-conflict levels over the next two to three weeks, with the steepest increases in California and the Northeast.
What could reverse this trend: a ceasefire or diplomatic breakthrough between the U.S. and Iran would likely trigger a sharp crude selloff, potentially unwinding $5–$8 per barrel of the risk premium within days. Saudi Arabia deploying spare capacity to signal market stability could also cap the upside. A significant build in EIA weekly petroleum inventories — suggesting demand is softening — would provide some relief.
For drivers, the practical calculus right now favors filling up sooner rather than later. Retail prices typically lag crude moves by one to two weeks, meaning the full impact of Brent's move above $96 may not yet be visible at your local station. Use GasBuddy or the AAA fuel price finder to locate the cheapest stations in your area — price dispersion tends to widen during rapid market moves, creating real savings opportunities for drivers willing to shop around. Wholesale club stations (Costco, Sam's Club) typically maintain the largest discount to street prices and are worth the detour during high-price periods.