Key facts
- US national average gas price reached a record $4.06 per gallon for August.
- Prices are up $0.05 from last week and $1 from a year ago.
- The US and Iran missed a diplomatic deadline to end their war.
- The Strait of Hormuz, a critical oil transit route, remains blocked.
- Eight major oil companies reported $90 billion in profits in the March-June quarter.
US gas prices have reached their highest recorded level for August, with the national average at $4.06 per gallon. This surge is attributed to stalled peace talks between the US and Iran and fresh threats from Donald Trump against Oman. Energy prices have been high since the US-Israel war began in February, leading to the blockage of the Strait of Hormuz, a critical chokepoint for global oil transit.
While Brent crude prices have decreased from their March peak of $112 a barrel to around $85, they remain about 30% higher than a year ago. Gas prices had dipped following brief peace agreements but have climbed again as diplomatic efforts falter, with both the US and Iran missing a 60-day deadline to resolve the conflict over Iran's nuclear program.
Trump's rhetoric has included threats to bomb Oman, a key strategic partner for the US, if it obstructs negotiations. He has also indicated no urgency to end the war without Iran meeting his demands. Over the past six months, Americans have incurred over $56.4 billion in additional gas expenses, averaging $477 more per household. Despite a recent cooling in energy prices contributing to lower overall inflation in July, consumer prices remain elevated compared to last year, with a significant portion of Americans reporting struggles with the cost of groceries and gas.
Meanwhile, major oil companies have reported substantial profits. Eight of the largest oil firms, including Aramco, BP, Shell, and ExxonMobil, collectively amassed $90 billion in profits during the March-June quarter, the first full financial quarter since the war commenced.