With President Donald Trump threatening the destruction of Iran’s energy and water infrastructure on Kharg Island early Monday, oil prices spiked again in response, causing a ripple effect for the American economy and hopeful summer travel plans.
Prices topped $115 a barrel for oil Monday morning, an increase of nearly 60% since the war in the Middle East began last month.
That’s why the average price of a gallon of gas is now at $3.96, according to GasBuddy—a high we haven't seen since 2022.
“Americans collectively are spending about $375 million more on gasoline every day than they did about a month ago,” said Patrick De Haan, Head of Petroleum at GasBuddy. “Give it 48 hours. There's probably a really good chance that we'll see $4 by Wednesday.”
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Airfare is also up significantly.
“We have actually seen a year-over-year increase in domestic fares by roughly 16 to 19% for summer travel specifically,” said Katy Nastro, a travel expert at Going.
While that price increase could be due to jet fuel costs and consumer demand, inflation continues to be a factor.
Inflation is now projected to hit 4% in 2026--1.2% higher than previously expected, according to a report from the Organisation for Economic Co-operation and Development.
This could lead many Americans to consider a change to their summer travel plans in order to save for other rising costs.
“It could diverge in two different directions where we see a lot of panic buying, people buying right now, driving prices up because they're worried about higher prices later,” said Nastro. “Or we could see a subset of travelers deciding, you know what, I don't even want to hedge my bets.”
“People are probably getting really anxious about summer right about now, and probably a lot of people are having impacts to their plans because they see the price today, and I think a lot people are expecting it to stick around,” said De Haan.
To combat these prices, the International Energy Agency moved to release about 400 million barrels of oil to offset shortages and boost supply at the beginning of March. But energy analysts warn it will take weeks once the barrels start to be released before we see prices tricked down to the pump.
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De Haan doesn't see it making much of a difference.
“That's not going to be real impactful in my opinion to the overall price of oil because it's kind of like replacing a water main with a paper straw. There's not a lot of oil that can flow out. If that were to change, that may be more impactful.”
If you do decide to travel this summer, experts advise that you book your flights sooner rather than later in order to avoid higher ticket costs.
