Gas prices hit record highs for August as Ukraine, Iran conflicts drive costs up

The national average price of gasoline stood at $4.05 a gallon Monday, the highest ever recorded this late in the calendar year, as escalating geopolitical conflicts on two fronts threaten to push prices even higher heading into the Labor Day weekend.

In Washington, drivers are paying more than $5 a gallon throughout much of the state, well above the national average tracked by fuel price service GasBuddy.

The price surge comes as President Donald Trump announced plans to launch what he described as “the most crushing economic operation” against Iran, adding fresh uncertainty to global oil markets already strained by the effective disruption of shipping through the Strait of Hormuz.

Global oil market’s refining capacity is under strain, analyst says

Patrick De Haan, head of petroleum analysis for GasBuddy, said the situation remains fluid but cautioned that a less-discussed factor, Ukraine’s sustained attacks on Russian oil refineries, is increasingly driving prices at the pump.

“It’s becoming less about the U.S. and Iran and the price of oil, but increasingly problematic are Ukraine’s attacks on Russian refineries, at least from the perspective of gas prices,” De Haan told “Seattle’s Morning News.”

De Haan explained that the global oil market depends not just on crude supply but on refining capacity, which is the ability to turn raw oil into usable products such as gasoline, diesel and jet fuel. Ukraine’s repeated strikes on major Russian refining installations have knocked significant capacity offline, forcing Russia to import refined products rather than export them.

“Russia is a significant refiner. It has capacity to turn that oil into products like diesel, jet fuel and gasoline, but increasingly, Russia is not able to export product,” De Haan said. “There’s only a finite amount of refineries globally, and with more of Russia’s refineries being attacked, they’re having to turn elsewhere, bringing in fuel, and that’s putting more pressure on those refined products themselves.”

The impact is particularly acute for diesel, which in some areas of California has climbed back above $7 a gallon. De Haan said diesel prices are “decoupling” from gasoline prices as a result of the refining squeeze.

There may be modest relief ahead. The Trump administration last week authorized the early return of winter-blend gasoline, about two and a half weeks ahead of the normal schedule. Winter gasoline is cheaper to produce, and De Haan said the transition could put some downward pressure on prices.

“For now, we may be seeing gas prices near their short-term peak as we make that change back over to winter gasoline,” he said. “That should bring with it some sort of price relief.”

But he added a significant caveat: hurricane season remains in full swing and could disrupt Gulf Coast refining at any time.

Convergence of crises has made fuel markets unusually volatile

Meanwhile, the U.S. Strategic Petroleum Reserve continues to decline under an authorized release that began in March. The reserve has fallen to about 295 million barrels and is expected to drop to roughly 260 million barrels over the next six to eight weeks, with about 5 million barrels being released weekly, De Haan said.

The convergence of crises has made fuel markets unusually volatile and difficult to forecast, De Haan said.

“Typically in the life of a petroleum analyst, there are a lot of things that can be predicted. But a lot of that has been just tossed completely aside this year,” he said. “It’s like predicting a roomful of levers and being able to predict which levers are going to move all at the same time.”

August 2026 is on track to become the most expensive month for gasoline in U.S. history, and Americans could for the first time see a national average above $4 a gallon on Labor Day, eclipsing the previous holiday record of $3.83 set in 2012.

De Haan said he hopes for an eventual return to stability but acknowledged the unpredictability may be the new normal.

“There could be development just a few moments away that could greatly change the outcome of the next few months,” he said.

Manda Factor is the host of “Seattle’s Morning News” on KIRO Newsradio. Follow Manda on X and email her here. 

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