US Oil Prices Expected to Stay Volatile as Kharg Island Strike Deepens Energy Crisis

Friday’s strike on Iran’s Kharg Island oil processing hub has deepened the global energy crisis, and US oil prices are expected to remain highly volatile as the conflict enters its third week. Analyst Patrick De Haan projects gasoline prices of $3.80 to $3.85 per gallon Monday, with $4 still possible but not yet inevitable. The strike on one of Iran’s most strategic energy assets is just the latest escalation in a conflict that has already driven US pump prices up 23%.
The conflict began on February 28, when the US and Israel launched coordinated strikes against Iran, setting off three weeks of rising energy prices and market turmoil. From a pre-conflict level below $3 per gallon, the national gasoline average has climbed to $3.70, placing additional financial strain on American households and businesses. Market analysts warn that each new escalation risks pushing prices beyond what consumers can comfortably absorb.
The Kharg Island strike, combined with Iran’s ongoing blockade of the Strait of Hormuz, has now reduced the availability of global oil supply by roughly 20%. Brent crude reached $106 per barrel early Monday before settling at $103, while US crude held near $94 following a $100 spike the prior day. The market appears to be caught in a cycle of temporary relief followed by renewed pressure as news from the conflict zone continues to flow.
In California, the consumer impact is most severe, with average prices exceeding $5 per gallon and certain Los Angeles stations charging above $8. National diesel costs for the freight sector could rise to $5.05 to $5.15 per gallon. Senior executives from Exxon, Chevron, and ConocoPhillips have all directly briefed White House officials on supply risks, with Exxon’s Darren Woods specifically highlighting the additional threat of speculative market activity.
Wall Street opened higher Monday as oil prices briefly retreated, with the S&P 500 gaining about 1% in morning trading. Oil company shares have climbed to record highs since the war began, reflecting investor confidence in continued price elevation. For the broader US economy, however, the crisis represents a serious challenge, with no relief in sight until the Strait of Hormuz reopens and military operations scale back.