Fuel prices have surged to their highest level since mid-2022, with petroleum analysts warning we could yet see record highs if the Trump administration can’t find a way to end its war with Iran anytime soon.
With the vital Strait of Hormuz effectively shut down, fuel shortages are mounting on a global scale. But while the U.S. has plenty of its own petroleum, pump prices have still surged to the mid-$4.00 range on a national level. And that’s “play(ing) havoc with a consumer’s monthly budget,” said Karl Brauer, executive analyst for iSeeCars.
In a newly released study, Brauer said motorists driving gas-powered vehicles can expect to pay an extra $706 for fuel over the course of a full year. That could drop, of course, if there is a settlement. On the other hand, the “war penalty” could rise substantially higher if the fighting drags on.
Playing Havoc
If anything, the $706 figure already may be lowballing the actual impact of the war. The study was based on the rise in gas prices from January through April – a 46% jump from $2.81 a gallon to $4.10, based on the AAA national average for self-service regular. Average fuel prices, measured on a daily basis, reached $4.564 on May 7, and stood at $4.391 a gallon on May 29.
The big question is whether the figure might top the all-time record $5.034 reached on June 16, 2022 in the wake of Russia’s invasion of Ukraine. At that level, motorists could wind up paying as much as $1,000 a year more than they would have at pre-war fuel prices.
These Vehicles Face the Biggest Penalty
Exactly how much more you’ll wind up spending on fuel will depend on a variety of factors, including your vehicle and powertrain, where you live and both how you drive and how far you drive. Lead-footed motorists might as well toss money out the window every time they floor the accelerator.
The vehicles hit hardest by rising fuel costs are, not surprisingly, those using only internal combustion engines. The Toyota Sequoia had the biggest increase of any vehicle included in the study, with an annualized penalty of $1,623. The Chevy Suburban was close behind, at $1,542 more than what a motorist would have paid based on pre-war fuel prices. And the Nissan Armada rounded out the top three with an increase of $1,512.
But there’s a big surprise here. SUVs and pickups, as one might expect, face significant increases, depending upon the size of the vehicle. Minivans, however, “had the highest annual fuel cost increase among major gas-powered vehicle segments, rising $1,139,” according to a summary from iSeeCars.
Hybrid Savings
ICE-powered vehicles are being hit hard by the war penalty “But consumers can reduce this risk by buying a hybrid or plug-in hybrid,” said Brauer. Indeed, “if a driver’s lifestyle and transportation needs can be fulfilled by an electric vehicle, EVs can help insulate consumers from recurring and substantial swings in fuel prices.”
Kyle Edward
That’s not to say owners of electrified vehicles aren’t feeling the war’s impact. Conventional hybrids, such as a Toyota Prius, still face an average $486 increase in fuel prices, while plug-in hybrids are forecast to go up $291.
The real savings come with battery-electric vehicles. While they don’t burn gasoline they are dependent upon local utility rates – which have been going up lately. Even so, the increase is likely to come in at just $11 for the full year, according to the study.
While the Trump administration has repeatedly claimed it’s close to working out a settlement with Iran there’s been no breakthrough so far. And even if one does develop in the coming days or weeks, it’s unclear just how quickly that might bring energy costs down. We could see it push into 2027 before prices get back to pre-war levels, analyst Michael Robinet warned Wednesday during a briefing at the Automotive Press Association.
