Gas Prices Are Still Squeezing American Families. Prices Could Increase Further In The Fall.

With the national average for gas reaching $4.15 a gallon on Labor Day, drivers are cutting back on travel, savings, and everyday expenses, while analysts warn that geopolitical tensions could prevent the usual fall decline in fuel costs.

The figure shows how much the market has changed since late February, when regular gasoline averaged $2.98 a gallon nationwide. The Labor Day price was nearly 40% higher, and August's average of $4.07 was the highest ever recorded for that month. AAA confirmed that the previous Labor Day record was $3.82, set in 2012.

The main obstacle to relief is the continuing disruption of global oil supplies. The Strait of Hormuz, a critical passage for petroleum shipments, remains largely blocked amid the conflict with Iran. At the same time, the war between Russia and Ukraine and attacks on Russian refineries have added pressure to energy markets. Crude oil prices have risen into the $90-a-barrel range, limiting the usual seasonal decline in gasoline costs. Brent crude almost hit $100 per barrel on Tuesday.

There is some disagreement over how quickly prices could fall should the war end. Energy Secretary Chris Wright has pointed to lower gasoline futures prices and the seasonal drop in driving demand as reasons for cautious optimism. However, he has also acknowledged that futures markets are volatile and do not guarantee lower prices at the pump.

The broader economy is also exposed to higher transportation costs. Diesel reached a record national average of $5.90 a gallon on Labor Day, according to AAA, increasing costs for freight and deliveries that can eventually reach consumers through food and other goods.

In fact, American households have paid more than $760 in additional gasoline and diesel costs since the Iran war began Feb. 28, according to an estimate from Brown University's Iran War Energy Cost Tracker. The nationwide increase had reached roughly $100 billion by Monday as fuel prices remained well above year-earlier levels.

The calculations use daily gasoline and diesel prices from AAA, consumption data from the U.S. Energy Information Administration and household data from the Census Bureau.

Brown researchers estimated in mid-April that Americans had spent about $20 billion more on fuel since the conflict began, equivalent to more than $150 per household. By May 18, the additional cost had more than doubled to over $40 billion, or more than $300 per household.

Diesel has accounted for a growing share of the increase as prices climbed to record levels. The national average reached a record $5.9015 a gallon Monday and stood at about $5.90 Tuesday, according to AAA, up from about $3.70 a year earlier. Regular gasoline averaged about $4.15 a gallon Tuesday, compared with roughly $3.20 a year ago.