U.S. motorists are facing near four-year highs at the pump, with the national average price of gasoline reaching roughly $4.18 per gallon on Tuesday, according to data compiled by the American Automobile Association. That represents an 11-cent increase so far this month and a $1.19 jump since late February.
Prices have surged more than 40% since the end of February, a period that coincides with U.S. and Israeli military action against Iran. Analysts say further upside at the pumps is possible if crude oil continues its recent advance.
Last week, benchmark crude markets rallied on mounting supply concerns. Brent crude futures rose by about 16% and U.S. West Texas Intermediate climbed nearly 13% as efforts to resolve the conflict with Iran failed to make progress. Earlier in the month, oil had paused after hopes briefly emerged that the Strait of Hormuz could reopen, but the respite did not hold.
Regional refiners and market observers point to refinery outages and scheduled maintenance in the Great Lakes as a key factor keeping prices elevated for Midwestern consumers. GasBuddy analyst Patrick De Haan noted that those refinery problems, combined with maintenance work, are likely to sustain upward pressure on local retail prices, and retailers in the Great Lakes region could raise prices again as early as today.
Several large refineries in the Midwest have been affected. BP's 440,000-barrel-per-day Whiting, Indiana refinery experienced a brief power outage over the weekend that forced one processing unit to be shut down. Phillips 66 took its 356,000-barrel-per-day Wood River refinery in Illinois partially offline at the end of February, removing the crude oil unit and other segments for a 45-day maintenance period. Marathon Petroleum's 253,000-barrel-per-day Robinson refinery in Illinois began planned maintenance in mid-March, with units expected to remain offline until mid-May.
Those combinations of higher crude prices and constrained regional refining capacity are contributing to the rapid rise in pump prices. Observers caution that if crude markets continue to rally and refinery throughput remains limited in the Great Lakes, consumers and downstream sectors could face sustained price pressure at the pump.
Key points
- Average U.S. gasoline approaches $4.18 per gallon, up 11 cents this month and $1.19 since late February.
- Brent crude gained about 16% last week and U.S. WTI rose nearly 13% amid stalled efforts to end the Iran conflict.
- Refinery outages and scheduled maintenance in the Great Lakes - including major units at BP Whiting, Phillips 66 Wood River, and Marathon Robinson - are tightening regional supply and may prompt further price increases for Midwest consumers.
Risks and uncertainties
- Further crude oil price appreciation could push gasoline prices higher - impacting consumers and transportation-dependent sectors.
- Ongoing or additional refinery outages and extended maintenance timelines in the Great Lakes could prolong elevated retail prices in the Midwest.
- Efforts to resolve the Iran conflict remain uncertain; continued geopolitical tensions could sustain volatility in crude and retail fuel markets.