Indiana’s Pump Shock: Gas Prices Surge Amid Iran Conflict as States Bear Uneven Burden

Gas prices jumped again last month. The national average for regular unleaded stood at $4.096 on Aug. 2, according to AAA. That’s after a volatile spring and summer shaped by conflict halfway around the world.

Since late February, when U.S. and Israeli forces struck Iranian targets, oil markets have lurched. Tehran responded by disrupting traffic through the Strait of Hormuz. One-fifth of global oil supply passes that chokepoint. Tankers slowed. Insurance rates spiked. Crude prices followed.

But the pain at American fuel pumps hasn’t spread evenly. Some states absorbed double-digit percentage increases in July alone. Others saw milder climbs or even small dips. The pattern reveals as much about domestic refining and distribution quirks as it does about distant geopolitics.

Business Insider crunched the numbers from AAA data. It compared state averages on July 31 against those from a month earlier. The result? Twenty states posted gains that beat the national 6.73 percent rise for the month. At the top sat Indiana.

Drivers there paid $3.63 a gallon by month’s end. One month prior the figure was $3.18. The 13.98 percent leap marked the sharpest in the country. Delaware followed close behind with a 12.92 percent increase to $4.16. Maryland came in third at 11.38 percent, reaching $4.16.

Arizona, Oklahoma, Iowa, Texas and Minnesota rounded out the top eight, each logging gains from 9.96 percent to 11 percent. Even states farther down the list such as Colorado, Nebraska and Utah saw increases near or above 9 percent. These jumps arrived after an earlier national peak of roughly $4.56 in May, per AAA figures cited by Business Insider.

The conflict’s early days delivered the biggest wallop. CNBC reported in late March that the U.S. average had topped $4 for the first time since 2022. That marked a more than 30 percent surge from pre-conflict levels. Oil prices had climbed on fears of supply loss. Brent crude jumped 15 percent in the opening phase, according to analysis later compiled on Wikipedia’s page tracking the war’s economic fallout.

Yet the story isn’t only about crude benchmarks. Regional factors matter. States dependent on Gulf Coast refineries felt the pinch differently than those served by Midwest or West Coast facilities. Pipeline constraints, seasonal maintenance and local tax structures all played roles. Indiana’s low base price before the July spike left more room for percentage growth even as absolute dollars stayed below coastal highs.

California still commands the nation’s highest prices. Its mid-grade fuel averaged $5.655 as of early August, according to AAA’s state-by-state breakdown. Hawaii, Washington, Nevada and Alaska followed with figures well above $4.70. These states often sit at the expensive end because of isolation, regulations or limited local supply. The Iran-related volatility simply layered on top.

Diesel told a parallel tale. The Guardian noted in mid-July that the U.S. diesel average had climbed past $5 a gallon. The Guardian tied the move directly to renewed uncertainty over the Strait of Hormuz after fresh airstrikes and diplomatic breakdowns. Truckers and farmers absorbed that hit first. Broader consumer prices soon reflected the pressure.

PBS documented the inflation ripple. By May, two in three Americans blamed the conflict for higher costs at the pump. PBS reported gasoline prices up 50 percent from the week before fighting began. The consumer price index responded. Former Federal Reserve Chair Janet Yellen warned that sustained energy shocks could complicate the central bank’s efforts to manage inflation.

U.S. News tracked the milestone in early May. The average then stood nearly $1.50 higher than pre-war levels, a 50 percent increase. U.S. News called it the highest mark since the conflict’s start. Northeastern University experts had predicted the trend back in March. They foresaw further climbs before any relief as oil infrastructure suffered damage.

Prices did ease for a time. AAA recorded a national drop to $4.24 by early June. Yet the latest data show stabilization at elevated levels rather than a return to early-year figures. The Wikipedia entry on the war’s economic impact notes that while oil prices retreated from initial peaks, U.S. gasoline still rose 5 to 10 cents daily in the conflict’s first phase. Full recovery of disrupted production will take months, if not longer.

Public sentiment on X, formerly Twitter, captures the frustration. Recent posts tie rising costs to the conflict’s persistence. One user noted polls showing most Americans view the war as not worth the fight and prioritize preventing further oil and gas price hikes. Another highlighted how the increases compound pressure on household budgets already strained by housing and other inflation.

Supply chain effects stretch beyond the pump. Higher fuel costs lift expenses for shipping, agriculture and manufacturing. Fertilizer prices, often tied to natural gas, move in tandem. Air travel and consumer goods feel the downstream impact. Economists caution that these secondary waves could linger even if crude benchmarks moderate.

The uneven state picture also underscores policy questions. Federal releases from the Strategic Petroleum Reserve provided some buffer in past crises. This time, domestic production has offered protection compared with import-heavy nations. Still, the U.S. exports record volumes of oil and refined products. That dynamic can mute the benefit for domestic consumers when global prices rise.

AAA’s latest commentary points to little change in the national average even as pump prices remain high. Uncertainty over when the Strait of Hormuz will see normal traffic keeps traders on edge. Summer driving demand adds further tension. A return to sub-$3 gasoline appears distant.

Drivers in Indiana, Delaware and the other high-increase states have noticed. Their percentage jumps outstripped the national trend in July. Those gains compound the earlier spring surge. For many, the war thousands of miles away now registers every time they fill the tank.

Markets will watch the next round of diplomacy and any shifts in Iranian oil flows. Until then, the variation across states serves as a live map of vulnerability. Some regions feel the conflict acutely. Others experience it more as background noise. The pump, however, tells the same story everywhere. Costs are up. Relief is not yet in sight.