By Mariah Rush and Violet Miller
Gas prices in Chicago have jumped to over $5 a gallon for the first time in four years — squeezing drivers who likely will see even higher prices in the coming months.
Austin resident Malik Allen was gassing up at a BP station Thursday at North Wells Street and West Chicago Avenue. The Moody Bible Institute student said he’s been filling up his sedan twice a week, usually to keep his gas tank at least half full when he can.
He spent $70 at the station, where regular gas was $4.99 a gallon.
“There’s no escaping it,” Allen said.
Chicago’s average price for a gallon of regular gas on Thursday was $5.01, up from $3.75 a year ago, according to AAA. Since the U.S. and Israel launched a major attack on Iran on Feb. 28, gas prices have increased by nearly 50%. The last time gas prices reached an average price of $5 a gallon in Chicago was in August 2022.
“It’s been a tremendous jump in Illinois, Indiana, Ohio and Michigan,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
Nationally, the average cost of regular gas was $4.30 on Thursday, surging 27 cents in one week. AAA said the national average price at the pump hasn’t been that high since July 2022, a few months after Russia invaded Ukraine.
The recent price increases are tied to Iran’s closure of the Strait of Hormuz in the Persian Gulf — the narrow mouth of the Persian Gulf. About a fifth of the world’s oil passes through the strait. But negotiations to end the war between the U.S. and Iran have stalled, and Iran’s chokehold on the vital waterway has shocked global oil supplies and prices.
It’s the largest disruption the oil industry has ever faced, according to Sam Ori, executive director of the University of Chicago’s Institute for Climate and Sustainable Growth.
“There’s never been anything in the history of the oil market that really is at the same scale as this. You’re talking about a fifth of the world’s oil supplies being disrupted,” Ori said. “There are some alternative routes, but in the best case, you’re still talking about a supply disruption of 10 [million] to 15 million barrels a day.”
The blockage impacts more than just gas prices for consumers.
“Gasoline prices are what you and I are going to complain about, but at the end of the day, it’s the price of diesel that is far more impactful to the broader U.S. economy,” De Haan said. “Everything in this economy moves with diesel.”
Seventy percent of the oil consumed daily in the U.S. is in the transportation sector, according to Ori. A spike in transportation fuel, like diesel, acts as a hidden tax on deliveries.