Pain at the pump may linger despite better situation in Iran, FAU professor says

Motorists have been feeling pain at the pump since the United States and Israel went to war with Iran nearly seven weeks ago.

They've been eagerly waiting for prices to decline, watching daily the cost of crude oil, which is then refined and sent to gas stations.

Steven Carnovale, associate professor of Supply Chain Management at the College of Business at Florida Atlantic University, was pleased when he woke up Friday to learn Iran announced the Strait of Hormuz would reopen, though the U.S. would block ships flagged by the nation.

One day later, hopes were deflated when Iran said it would close the shipping passageway again.

"That was a good sign. And as much as the ending geopolitical conflict is a good thing, of course," Carnovale told Gulf Coast News' sister station, WPBF, on Friday.

Iran closes Strait of Hormuz again over US blockade and fires on ships

Yet, so many facts play into what people pay at the pump.

"Oil is the onion of the global economy," he said. "You start peeling back its impacts, it's pretty consequential how impactful the prices actually are outside of just fuel prices, that's very good.

Price trend

Before the war with Iran began on Feb. 28, U.S. gas prices averaged approximately $2.92 to $2.98 per gallon. They exceeded $4, driven by a surge in crude oil prices above $100 per barrel, according to data from AAA.

In some states, including California, an unleaded gallon was more than $5 per gallon.

In Florida, AAA listed the average unleaded price at $4.05 on Saturday, down 5 cents from Friday. It peaked at $4.23 earlier this month. One month ago, it was $3.93, and one year ago, $3.02.

AAA motorclub

Just because oil is flowing, it doesn't mean all of a sudden prices will drop significantly. It takes time for gasoline to reach the pipeline or, in the case of Florida, on tankers to ports in Fort Lauderdale, Tampa and Jacksonville, then shipped on trucks.

Price factors

Factors include supply and demand, summer usage peak, refinery limitations, damaged oil fields and local cost of living.

"Basically, the price of crude is the one that gets reported most frequently in the news in terms of like the volatility with geopolitical conflicts," Carnovale said. "That represents about 50% of what drives the price at the pump. But there's also other elements involved."

Often, prices spike at the pump as reactionary.

"The immediate price increase was certainly felt," he said. "But the question is, how quickly does it take for the price of crude to reflect itself in the gas price? And that's really variable, because the other element, too, is how much oil we actually get from that region."

World usage vs. U.S.

Although 20% of the world's oil supply comes from the Persian Gulf, only 7% is consumed in the United States.

"If we lose the 7%? Well, we've got the strategic reserves since the last time we had the kerfuffle with Iran," the FAU professor said. "And if you recall, in the beginning, we initially released some of that."

Yet, the United States is not in a bubble, and the crude prices are worldwide futures: West Texas Intermediate and Brent Crude.

"You know, that we make in the United States, or at least extract in the United States, kind of buffers the impact of what was constrained by the imports in the Persian Gulf," the FAU professor said. "So a lot of people sometimes want to say, OK, we're getting most of our oil from the United States.

Taxing situation

Taxes also make up a good deal of the cost. As of early 2026, Florida drivers pay approximately 39.4 cents per gallon in state-level gas taxes. When combined with the federal excise tax of 18.4 cents per gallon, the total tax burden is roughly 57.8 cents per gallon, though local county taxes can increase this total, according to the Tax Foundation.

"If you'll recall, at the beginning of the geopolitical conflict in Iran, governments were talking about removing the tax on gas or lowering it temporarily to provide a certain degree of price relief for consumers," Carnovale said. "It takes a bit of time for the supply, the cost increases on the crude prices on the market to reflect at the actual pump."

Stocking up and belt-tightening

Businesses, including airlines and truck companies, engage in a balancing act of whether to stock up on fuel.

"What you're likely seeing is the hedging," he said. "People are taking into account what they think will go up. So they're beefing up the prices to account for future gas prices or future crude prices going up. With all that said, generally speaking, the price of crude will eventually if it goes down, which it has today, I think it went from like $110 down to $89 at my last check."

People are learning to adjust to the increases.

"Like it's almost as if I anticipate that my car insurance bill is going to increase, over the next, you know, six months, I might figure out ways to cut the budget elsewhere to prepare for that price increase," Carnovale said. "Similarly, if I, as a producer or a seller of oil, anticipate the fact that crude is going to go up, and then after it's refined, once it gets passed down to me, eventually the price that I'm paying for my supply is ultimately going to go up.

"I'm going to pass through those anticipated costs to be able to prepare myself for the future increase in cost. There's a lot of that that goes on, too, because it's not a 1-to-1. That's the thing you've got to keep in mind. But just because the price in crude goes up doesn't mean that if it goes up by $1, you know, per gallon, I'll just say that it's going to immediately be passed on to the consumers."

Running on diesel

Diesel prices have been running higher than unleaded.

"Much of the world runs on diesel," he said. "Diesel prices, those enter into transportation costs."

On Saturday, AAA listed the diesel average price as $5.54 per gallon, contrasting with $3.53 one year ago.

He noted it's not strictly gasoline and natural gas that are affected.

"It's all of the other things that either rely on oil from a global supply standpoint, come out of that region," Carnovale said. "Things like fertilizer, helium gas for semiconductor manufacturing, all that sort of stuff."

These users aren't feeling the pain at the pump. About 1.9% of the roughly 291 million total vehicles in the U.S. rely on electric engines.

"I guess if you have a Tesla, you're doing well these days," he said.

Looking into the future

Many oil production facilities were damaged in the Middle East, including refineries in Saudi Arabia and Kuwait and oil tanker terminals in the United Arab Emirates and Iran.

Some countries slowed down or halted production during the war because of the stoppage in shipping through the Strait.

“It’s not a light switch. Everyone’s impatient and saying, ‘Go, go, go,’” Patrick De Haan, head of petroleum analysis at GasBuddy, said in a webcast. “But it will take time to get these flows of oil through the Middle East fired back up again.”

Carnovale has reason to be optimistic.

"Ultimately, if the gas price or the crude prices continue to go down, you will definitely see the pump price go down. It might take a bit of time," Carnovale said.

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