The Hormuz Crisis and Gasoline Prices: How Does 2026 Compare?

The Strait of Hormuz, a narrow waterway between Iran and Oman connecting the Persian Gulf to the Arabian Sea, is one of the world’s most critical energy checkpoints. In 2025, approximately 20 million barrels of oil and petroleum products crossed the Strait daily, representing around 25% of global seaborne oil trade and 34% of all traded crude oil. Around 20% of global liquefied natural gas (LNG) trade passed through the passage, originating mostly from Qatar and the UAE, which have no alternative export routes available. The region also accounts for substantial shares of global fertilizer exports, including roughly 30% of urea and 20% of ammonia trade.

Since February 2026, escalating U.S.-Israeli military operations against Iran have triggered a severe disruption to Strait transit. Iran’s Revolutionary Guard declared the Strait closed on March 4^th, and a combination of vessel attacks, mine-laying, and war risk insurance cancellations drove tanker traffic to near zero. The strait has partially reopened at various points during ceasefire periods but has been repeatedly re-closed as negotiations have stalled. While some nearby countries can reroute a small amount of crude oil through pipelines, this capacity falls short of the normal 20 million barrels that pass through the Strait daily.

Exhibit 1 displays global monthly nominal spot prices for West Texas Intermediate (WTI) and Brent crude oil from 1987 to 2026. Before the lead-up to the 2008 financial crash, crude prices were relatively stable, with WTI and Brent both trading between $15 and $30. The 2007-2008 commodity boom drove both benchmarks to record highs near $135 per barrel, followed by a sharp collapse following the global financial crisis. Since then, crude markets have been characterized by greater volatility and higher price floors than in the pre-2008 era, with major spikes associated with the post-COVID demand recovery and Russia’s invasion of Ukraine pushing Brent above $120 per barrel. Most recently, the ongoing conflict and the blockade of the Strait of Hormuz have driven prices sharply higher, with prices rising from around $60 per barrel in early 2026 to over $115.

Exhibit 1: Global Crude Oil Prices, West Texas Intermediate and Brent, Nominal, 1992–2026, EIA

Exhibit 2 presents the same Brent and WTI series adjusted for inflation using the U.S. CPI-U, expressed in January 2026 dollars. Many of the major patterns from Exhibit 1 remain, though the real price series offers some important reframing. Before the lead-up to the 2008 commodity boom, real crude oil prices were primarily below $60 a barrel in today’s dollars, meaning the nominally cheap oil of that period was not dramatically less expensive in real terms compared to today. The 2008 peak, which looked striking in nominal terms, appears even more extreme when inflation-adjusted, with real prices approaching $200 in today’s dollars, a level that current prices have not come close to matching. After moderating through the early 2010s, real prices generally floated between $40 and $80 up until the Ukraine-driven spike. Today, the Hormuz crisis has pushed real prices from around $60 per barrel to just under $100, a substantial shock, but still well below the 2008 peak.

Exhibit 2: Global Crude Oil Prices, West Texas Intermediate and Brent, CPI-U Adjusted, January 2026 Dollars, 1986–2026, EIA

Exhibit 3 presents monthly regular unleaded gasoline prices for Phoenix, Tucson, and the U.S. City average. Tucson data are available from 2006 onward, while Phoenix and the national average extend back to 1996. Phoenix and Tucson generally track national prices closely, though both Arizona metros have tended to run at or slightly below the national average. Tucson generally prices below the U.S., with 2022-2024 being the only years in the available data where Tucson averaged meaningfully above it. Phoenix’s relationship with the national average has shifted more over time, running below it from roughly 2006-2017 before more frequently exceeding it in recent years. On a nominal basis, prices have risen substantially over this period. Gas traded below $1.50 per gallon through much of the late 1990s before the 2008 boom pushed prices above $4. April gas prices hit $4.87 in Phoenix, $4.58 in Tucson, and $4.12 nationally. For context, nominal prices peaked at just $4.08, $3.82, and $4.11 during the Great Financial Crisis, and reached their highest point during the 2022 Ukraine shock, when Phoenix hit $5.62, Tucson $4.78, and the U.S. $5.01.

Exhibit 3: Regular Unleaded Gasoline Prices, Phoenix, Tucson, and U.S. City Average, Nominal, 1996–2026, EIA, EBRC via AAA

Exhibit 4 presents the same retail gasoline price series deflated by the U.S. CPI-U and expressed in January 2026 dollars. The broad patterns from Exhibit 3 remain, but the real series reveals that gasoline was never as cheap as its nominal price suggested, with prices in the late 90s that appeared low at $1.50 per gallon translated to roughly $2-3 in today’s dollars. The pre-2008 boom pushed real prices above $6 a gallon before collapsing, and the early 2010s saw a prolonged period of elevated real prices around $5 per gallon. Real prices then declined through the late 2010s, settling in the $3-4 range, before Russia’s 2022 invasion of Ukraine drove another spike back above $6. Since then, prices have remained elevated in real terms, fluctuating heavily but not returning below $3 per gallon, suggesting a new baseline for gasoline prices going forward. In real terms, April prices reached $4.79 in Phoenix, $4.50 in Tucson, and $4.05 nationally. These remain below both the 2008 peaks ($6.13, $5.74, and $6.13) and the 2022 spike highs ($6.22, $5.29, and $5.54).

Exhibit 4: Regular Unleaded Gasoline Prices, Phoenix, Tucson, and U.S. City Average, CPI-U Adjusted, January 2026 Dollars, 1996–2026, EIA , EBRC via AAA

The ongoing Strait of Hormuz crisis has driven crude oil and retail gasoline prices sharply higher, reversing the trend that started with Russia’s full invasion of Ukraine in 2022. However, as the real price series makes clear, current prices, while painful, are not unprecedented. The 2008 commodity boom produced a more severe spike, and prices fell after the initial jump. History suggests a similar pattern is plausible once the current situation resolves; crude and gasoline prices have consistently fallen back after periods of elevated supply-side stress. Consumers should expect some relief once stability returns to the Strait.

Phoenix and Tucson retail gasoline prices reflect EBRC monthly mid-month recordings from AAA. The U.S. City Average series is constructed from U.S. Energy Information Administration (EIA) weekly retail gasoline price data, using the observation closest to the 15th of each month to approximate a mid-month measure consistent with the AAA series. Crude oil spot prices for West Texas Intermediate and Brent are sourced from the EIA. All nominal series are deflated using the U.S. CPI-U, obtained from FRED, and expressed in January 2026 dollars.