Four years ago, Russia attacked Ukraine, and oil shot up 50% in a matter of weeks, north of $100 a barrel. Gasoline quickly rose from around $3.50 to $5 a gallon.
That war put 3 million barrels a day of Russian crude at risk.
The war with Iran stopped the flow of 20 million barrels of oil from across the Middle East almost instantly.
Yet oil prices rose just 6% Monday, and gas prices aren’t expected to get close to $5 a gallon anytime soon. On Tuesday, oil rose another 7% to around $76 a barrel, and gas shot 11 cents higher to $3.11 a gallon.
What changed?
What’s different about this war
Russia launched the war in Ukraine, but this one was initiated by the United States. That means Washington can end its attack when it sees fit.
Although President Donald Trump has suggested the war could continue for several weeks, the political reality at home could curtail his plans: sinking polling numbers as Americans confront stubbornly high costs of living. Affordability remains a major issue for voters ahead of this year’s midterms, and higher gas prices could hurt Republicans.
“The specific US endgame remains unclear,” Ed Mills, Washington policy analyst at Raymond James, wrote in a note to clients on Sunday night. That means, though, that Trump can “declare victory” whenever he wants, Mills added.
US Secretary of Defense Pete Hegseth seemed to signal the conflict would be limited in duration in remarks early Monday, sending oil futures down from earlier highs.
“This is not Iraq. This is not endless,” Hegseth said from the Pentagon. “This is the opposite.”
Crude is abundant
There’s also more crude oil available now than in 2022, even as consumption remains steady.
Back then, energy demand was climbing rapidly as the economy emerged from the pandemic.
OPEC+ nations ramped up production over 2025, adding to a supply glut.
The excess crude is why West Texas Intermediate, the benchmark price for US crude oil, was safely trading below $60 a barrel until recently. Crude closed above $70 a barrel on Monday for the first time since late July.
“There’s plenty of crude oil out there,” said Tom Kloza, an independent oil analyst and advisor to Gulf Oil. “There’s more crude oil… than there is demand for it.”
Some risks greater than 2022
Although the market is currently betting against a scenario that could mimic the 2022 oil and gasoline price shock, prices could still surge.
In many respects, the war with Iran poses greater risks to the oil market than Russia’s war with Ukraine when that conflict began in 2022.
Iran is a smaller producer than Russia. But oil-producing US allies in the region have seen attacks on their own infrastructure as well, including key OPEC members Kuwait and Qatar as well as Saudi Arabia, the world’s largest oil exporter.
And tanker traffic through the Strait of Hormuz, a channel just off Iran’s southern coast through which one out of every five barrels of oil on the planet passes, has essentially ground to a halt. Vessel operators and maritime insurers don’t want to risk sailing through it while fighting rages.
“The war between the United States and Israel against Iran has the potential to be the largest oil supply disruption in history if oil flows via the narrow Strait of Hormuz remain low or come to a halt,” Jim Burkhard, head of crude oil research at S&P Global Energy, wrote in a report on Monday.
According to S&P, just five oil tankers transited the Strait of Hormuz on Sunday, down from the recent average of 60 tankers per day.
“When Russia invaded Ukraine, crude oil prices rose by about 50% in a few weeks,” said Bob McNally, president of Rapidan Energy Group. “We have way more oil at risk now.”
Emergency response
If prices do skyrocket, the Trump administration may have less firepower to respond than the US did in 2022.
The rise in oil and gasoline prices after the war in Ukraine proved short-lived, partly because the US government released a record 180 million barrels of oil from the nation’s Strategic Petroleum Reserve, or SPR. The world’s largest stockpile of emergency oil, the SPR is held in a network of underground salt caverns in Louisiana and Texas.
A source familiar with White House plans told CNN that tapping the SPR is not under consideration at this time.
White House spokesperson Karoline Leavitt also said the administration will continue to monitor the situation.
“The Trump Administration’s policies have led to the highest production of U.S. oil ever with even more oil from our newfound market and agreements with Venezuela,” she said.“The Departments of Energy and Treasury will continue to monitor oil markets and do everything possible to keep prices stable.”
America’s emergency oil stockpiles remain sizable, but they are now about 30% smaller than when Russia invaded Ukraine in February 2022.
“There are buffers — strategic reserves, rerouted cargoes, elevated floating inventories, but those are stopgaps,” said Angie Gildea, KPMG’s US energy strategy leader. It’s uncertain how long the war will last, she said, and “the critical variable is duration.”
McNally said past instances have trained the market to think that while “conflicts happen, severe supply interruptions don’t.”
“Over the past seven years there have been a series of ‘boy-who-cries-wolf’ moments for the oil market. Geopolitical scares that faded and allowed oil prices to recede. Remember, the story didn’t end up well for the boy,” McNally said. “If Iran stays in the fight, this is going to be an authentic energy crisis the likes of which we haven’t seen in modern times. This could be the big one.”
