Money MoveTL;DR
- Gas prices jumped 19% in one month to a national average of $3.45 per gallon, driven by the U.S.-Israel military conflict with Iran disrupting oil shipments through the Strait of Hormuz.
- New tariffs under the Trade Act of 1974 started at 10% and are expected to rise to 15% this week, adding pressure to car prices and parts costs.
- Commercial auto insurance renewal rates are still climbing at 5.18%, and you can fight back by shopping your policy now.
Key numbers at a glance
| Metric | Current | One week ago | One month ago | Source |
|---|---|---|---|---|
| Regular gas (national avg) | $3.45 | $2.98 | $2.90 | AAA, March 8, 2026 |
| Diesel (national avg) | $4.60 | $3.76 | $3.64 | AAA, March 8, 2026 |
| Crude oil | Mid-$70s/barrel | Mid-$60s/barrel | Low $60s/barrel | Car and Driver, March 6, 2026 |
| Global tariff rate | 10% (rising to 15%) | 10% | 0% (pre-order) | Insurance Journal, March 6, 2026 |
| Commercial auto insurance renewal | +5.18% | +5.62% | +5.62% | Ivans Index, February 2026 |
The Strait of Hormuz problem
Nearly a week into the U.S.-Israel military conflict with Iran, the economic ripple effects are slamming car owners hard. The most immediate hit is at the gas pump.
According to AAA's latest data from March 8, the national average for regular gasoline surged to $3.45 per gallon. That's up from $2.98 just one week ago and $2.90 a month ago. Diesel is even worse at $4.60, up from $3.76 a week ago.
The reason is simple geography. The New York Times reported that roughly 80 oil and gas tankers normally pass through the Strait of Hormuz daily. By early this week, that number dropped to one or two per day. That bottleneck is choking global oil supply and pushing crude into the mid-$70s per barrel.
As Car and Driver noted, the last time gas prices made a weekly jump this big was March 2022, right after Russia invaded Ukraine.
How we calculated the annual cost impact
The average American drives about 13,500 miles per year and gets roughly 25 miles per gallon, according to the Department of Transportation. That's 540 gallons per year.
- At $2.90/gallon (one month ago): $1,566/year
- At $3.45/gallon (today): $1,863/year
- Extra cost: $297 per year, or about $25 more per month
If prices keep climbing toward the $4.00 range that some analysts predict for summer, that gap grows to $594 per year.
Tariffs are stacking on top
While gas prices grab the headlines, tariffs are quietly making car ownership more expensive too.
After the Supreme Court struck down most of Trump's IEEPA-based tariffs on February 20, the administration immediately pivoted to Section 122 of the Trade Act of 1974. That imposed a 10% tariff on imports across the board. According to Insurance Journal, Treasury Secretary Scott Bessent said those rates would likely rise to 15% later this week.
Twenty-four states have already filed a lawsuit to block the new tariffs, calling them an "end run" around Congress.
For car owners, auto-specific tariffs that survived the Supreme Court ruling are still in effect. That means imported vehicles and parts are getting hit twice: once by the auto-specific levies and again by the new global tariff. If you're shopping for a new car or need major repairs with imported parts, expect higher prices through the spring.
Auto insurance: still climbing
The February 2026 Ivans Index shows commercial auto insurance renewal rates at 5.18%, down slightly from 5.62% in January but still solidly positive. Umbrella coverage saw the sharpest drop, falling from 10.47% to 8.84% month over month.
For personal auto, the story is similar. Insurance shopping has been spiking as consumers feel the squeeze from multiple directions. If you haven't shopped your auto insurance in the last 6 months, now is the time. Carriers are competing aggressively for new customers even while raising renewal rates.
5 things you can do right now
- Track your gas spending for one week. Open your bank app, tag every gas purchase, and compare to what you spent in February. Seeing the real number motivates action.
- Use GasBuddy or AAA's fuel finder to compare prices at stations near your commute route. Price gaps of $0.20 to $0.40 per gallon between stations within a few miles are common right now.
- Shop your auto insurance this week. Get at least 3 quotes. Carriers discount new customers while raising renewal rates. The same coverage from a different carrier could save you $200 to $500 per year.
- Delay non-urgent car purchases. Tariff uncertainty means prices could shift significantly over the next 150 days (the legal limit on the current tariff authority). If you can wait, wait.
- Check your tire pressure and air filter. Properly inflated tires and a clean air filter can improve fuel economy by 3% to 7%, according to the Department of Energy. At $3.45/gallon, that's $56 to $130 saved per year.
FAQ
How long will gas prices stay high? It depends on the conflict. The current tariffs under Section 122 are limited to 150 days without Congressional approval, but gas prices are driven more by the Strait of Hormuz situation. If shipping normalizes, prices could ease within weeks. If the conflict escalates, $4.00+ is realistic by summer.
Will the 24-state tariff lawsuit lower car prices? Not immediately. Legal challenges take months to resolve. The IEEPA tariff case took weeks to reach the Supreme Court because of the scale of economic impact, but the new tariffs could remain in effect during litigation. Auto-specific tariffs have separate legal authority and are unlikely to be affected.
Should I lock in an auto insurance rate now? Yes. Insurance rates tend to follow repair and parts costs with a 6 to 12 month lag. If tariffs push parts prices higher through 2026, expect another round of auto insurance increases later this year. Locking in a rate now gives you a lower baseline.
Are EVs cheaper to own right now? The fuel math is getting more favorable. AAA reports public EV charging costs remained steady at $0.39/kWh, while gas jumped 19% in a month. Home charging at average residential electricity rates ($0.16/kWh) makes the gap even wider. But EV purchase prices are also affected by tariffs on imported vehicles and battery components.
Sources
- AAA Gas Prices (March 8, 2026)
- Car and Driver: Gas Prices Rose Almost 9 Percent Since War in Iran (March 6, 2026)
- Insurance Journal: 24 States File Lawsuit to Stop Trump's Latest Global Tariffs (March 6, 2026)
- Ivans Index: February 2026 Results (February 2026)
- Insurance Journal: GL, Workers' Comp Only Lines With Monthly Rate Increase (March 6, 2026)
- The New York Times: Iran War Oil and Gas Impact on Strait of Hormuz (March 3, 2026)