Gasoline Prices Hit 40% Higher Than Last Year as Iran Conflict Disrupts Oil
Gas prices have surged 40% year-over-year to $4.41 per gallon as of October 1, 2026, driven by the Iran conflict restricting oil supplies through the Strait of Hormuz. Energy costs remain a major expense for expats with cars, especially in states like California where prices exceed $6 per gallon.
The U.S. average is $4.41/gallon as of October 1, 2026, 39.7% higher than a year ago, when regular averaged $3.16 per gallon. This sharp increase directly impacts anyone who owns or rents a car, takes rideshares, or relies on delivery services.
Why Prices Are So High
Less oil is getting through the Strait of Hormuz (reducing global oil supply and refining capacity), so crude costs more, and refiners' costs for turning oil into gasoline are near their 2022 record. Gas prices are up 50% compared to February 26, 2026 ($2.96) and up on average 28% compared to the same 32 week period in 2025.
Regional variation is striking: California has the most expensive gas in the US costing $6.40 a gallon, followed by Hawaii ($5.62) and Washington ($5.50), while gas is at its cheapest in Indiana at $3.81 and Texas at $3.94. For a foreign professional relocating, location choice matters enormously. The national average for a gallon of regular gasoline dropped nearly 7 cents from last week to $4.41, showing some recent relief, but longer-term trends remain high.
As an expat, budget roughly 25% more for transportation than you would have budgeted a year ago. If you're considering relocation within the US, factor in regional fuel costs—they vary dramatically. Remote work and public transit options become more valuable when gas is this expensive.
Sources
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