Key facts
- The national average cost of unleaded gasoline reached a record $4.15 per gallon on Labor Day.
- Diesel prices increased to $5.90 per gallon, up from $3.70 a year ago.
- Escalating military actions between the U.S. and Iran have driven crude oil prices up, with Brent crude trading above $97.
- Ukrainian attacks have crippled about 40% of Russia's oil refining capacity.
- US gasoline inventories fell to 205.7 million barrels for the week ending August 28, 2026, below the five-year average.
- High fuel costs are impacting consumer travel plans and have become a significant political issue ahead of midterm elections.
Labor Day gasoline prices reached a record $4.15 per gallon, a 30% increase from the previous year, driven by escalating geopolitical tensions in the Middle East and disruptions to Russian refining capacity. Diesel prices also saw a significant jump to $5.90 per gallon. These high fuel costs are impacting consumer travel, with many cutting back on road trips and long-distance plans, and airfares also increasing. The conflict between the U.S. and Iran has led to direct military actions, including the U.S. sinking Iranian oil tankers and Iran threatening retaliation against U.S. interests and companies. Simultaneously, Ukrainian attacks have severely damaged Russia's oil refining infrastructure, further tightening global supplies. U.S. and European fuel inventories are at critically low levels, with U.S. refiners operating at near-full capacity but struggling to meet demand. The elevated energy prices are proving to be a significant financial burden on American consumers, costing over $100 billion, and are expected to influence voting in the upcoming midterm elections.