Regular gasoline in the Portland metro area reached $5.03 per gallon as of Friday, Sept. 4. Prices are still climbing.

The surge traces directly to the U.S.-Iran war, which began Feb. 28 and has choked off roughly a fifth of the world's oil supply through the Strait of Hormuz. On Wednesday, Sept. 9, the national average for regular gas climbed to $4.22 per gallon, nearly 42% above the $2.98 average before the conflict started, according to OPB, citing AAA data. Oregon's statewide average stood at $5.00 as of Sept. 4, the fourth-highest in the nation.

For Bethany and Cedar Mill commuters filling up along Northwest 185th Avenue or Cornell Road, that means paying more than a dollar above what they paid in late February, when Oregon's average was $3.92.

Diesel hits record, grocery prices climb

Diesel prices are climbing even faster. The national average hit an all-time record of $5.94 per gallon on Sept. 9, a 58% jump from pre-war levels, according to AAA. Oregon's diesel average was already $6.17 as of Sept. 4, according to AAA data compiled by Philomath News.

Patrick De Haan, head of petroleum analysis at GasBuddy, warned on Sept. 9 that a $6 national average is coming. "$6 diesel is now in the pipeline; it's unavoidable," De Haan told KUNP.

That matters at the grocery store. Fuel accounts for 15% to 30% of the total cost of food, according to the Independent Grocers Alliance. U.S. grocery prices were up 2.7% year over year in July, with seafood up 7% and fresh fruit up 4.9%, the AP reported. David Ortega, a food economics professor at Michigan State University, told the AP that as freight contracts reprice and fuel surcharges take hold, more of the cost reaches shoppers.

Brown University researchers estimated the war-driven fuel surge has cost each American household more than $770 as of Sept. 9.

Why prices keep climbing

Brent crude oil, the international benchmark, settled at $101.21 per barrel on Sept. 9, crossing triple digits for the first time since July. The spike followed an escalation in fighting: U.S. forces destroyed five Iranian oil tankers on Tuesday, Sept. 8, and Wednesday, Sept. 9, and an Iranian-backed Houthi group struck Saudi oil facilities, threatening an alternative shipping route.

AAA spokeswoman Marie Dodds told KATU on Sept. 3, ahead of Labor Day weekend, that dwindling summer-blend gasoline supplies and possible operational issues at the Olympic Pipeline were adding to Pacific Northwest prices on top of the war's impact.

Bank of America analysts warned that if attacks continue to choke Strait of Hormuz traffic, oil could reach $95 to $120 per barrel. Damage to major energy infrastructure could push spikes to $150. A durable peace deal before the November midterm elections looks "increasingly unlikely," the analysts said.

Oregon's all-time record gas price of $5.55, set June 15, 2022, is within reach if the trend holds.