Lead: Since fighting began in Iran on February 28, 2026, a supply shock has pushed U.S. pump prices higher by roughly $0.60 per gallon, reflecting global crude moves and local market mechanics. As of March 13, 2026, the national average stood near $3.63 a gallon, and crude remains the largest single input but not the only one. Government and industry data show that crude oil makes up about 51% of the retail price; the remainder stems from refining, distribution, taxes and retailer margins. Understanding each component explains why oil price swings do not translate one-for-one into what drivers pay.
Key takeaways
- Crude oil accounts for roughly 51% of the typical U.S. retail gasoline price, per the U.S. Energy Information Administration (EIA).
- Brent crude, the global benchmark, rose to about $100 a barrel on March 13, 2026—around a 38% jump from $73 before the Iran conflict—pushing domestic pump prices higher.
- Refining costs represent about 20% of pump prices, reflecting the expense of converting crude to gasoline and other fuels.
- Marketing and distribution add roughly 11%, covering transport, terminaling and retailer operating costs; individual stations typically earn about $0.30–$0.35 per gallon.
- Taxes make up the remaining share: the federal gas tax is 18.4 cents per gallon, and the state average is about 34 cents, ranging from 9 cents in Alaska to 70.9 cents in California.
- Seasonal fuel changes—such as the switch to summer-blend gasoline—raise costs by an estimated $0.15 per gallon in many markets and are required in most states between June 1 and September 15.
Background
The last two weeks of February 2026 marked a sharp increase in geopolitical risk after hostilities began involving Iran, tightening oil market sentiment worldwide. Although the United States is the largest crude producer by volume, U.S. retail gasoline prices often follow Brent crude because Gulf Coast refiners and international benchmarks influence what refiners pay. Historically, spikes in crude prices tend to be the most visible driver of pump-price increases, but downstream factors blunt and delay the pass-through to consumers.
Refining capacity, regional refinery outages and fuel specification changes introduce another layer of cost and volatility. Refineries are complex and regional—fuel supplies move through pipelines and terminals before reaching local stations—so localized bottlenecks can raise retail prices even when crude costs moderate. Taxes and state regulatory regimes create persistent differences across states; California’s higher tax and cleaner-fuel mandates are a notable example, producing materially higher pump prices there than in low-tax states like Alaska.
Main event
Since February 28, Brent has climbed and hovered near $100 per barrel, up roughly 38% from about $73 immediately before the Iran conflict, according to market data cited by industry trackers. That increase tightened the cost basis refiners face, contributing to about a $0.60 per-gallon rise in U.S. retail gasoline by mid-March 2026. Because many Gulf Coast refineries price crude on benchmarks linked to Brent, domestic pump prices are more sensitive to international benchmark moves than to West Texas Intermediate (WTI), the U.S. inland benchmark.
The path from crude to pump involves several stages: extraction and crude trading; refining to produce gasoline and other petroleum products; shipment to terminals via pipeline or tanker; and delivery to stations by truck. Each stage adds handling, processing and financing costs that accumulate in the retail price. Retailers then set a final shelf price that covers their operating expenses and a modest per-gallon margin—industry estimates put that margin in the $0.30–$0.35 range on average, though margins can shrink during rapid crude rallies.
Seasonal specification changes also affect supply and cost timing. States begin shifting to more expensive summer-blend gasoline in late winter and spring; these blends are costlier to produce and are typically sold from June 1 through September 15 in many jurisdictions, adding roughly $0.15 per gallon in the transition months. Meanwhile, consumer demand for gasoline generally rises in spring and summer, amplifying upward pressure on prices when supply tightness or higher crude costs coincide with stronger driving season demand.
Analysis & implications
Short-term: A sharp rise in Brent raises the crude share of pump prices immediately, but not all of the increase is passed through at once. Refiners and retailers often absorb some costs temporarily; rapid price spikes can compress station margins as stations wait to adjust posted prices. Conversely, when crude falls, retail margins frequently widen as posted prices lag declines.
Medium-term: Refining capacity and location matter. U.S. refiners exposed to Brent-linked feedstock will continue to transmit international price swings to domestic gasoline. Regional refinery outages, maintenance cycles and seasonal blend transitions can create localized price differences that persist beyond crude-market moves. Policymakers watching inflation and consumer mobility may feel pressure to address temporary spikes but have limited tools to control global benchmark prices.
Long-term: Tax policy and energy transition choices will shape the structural components of pump prices. High state taxes and stricter fuel regulations—intended to reduce pollution and support infrastructure—raise baseline costs, meaning consumers in some states always pay more regardless of crude price. Meanwhile, shifts in vehicle fuel efficiency, electric vehicle adoption and alternative fuels will progressively change gasoline demand and its price sensitivity to crude over time.
Comparison & data
| Component | Share of pump price |
|---|---|
| Crude oil | 51% |
| Refining | 20% |
| Marketing & distribution | 11% |
| Taxes (federal + state avg) | ~(18.4¢ federal + avg 34¢ state) |
The table shows the typical national shares; actual pump prices vary by region and station. States set their own excise taxes (average ~34 cents per gallon, range 9¢–70.9¢), and federal tax of 18.4¢ per gallon is uniform nationwide. Because taxes are fixed per gallon rather than percentage-based, they constitute a larger share of the retail price when crude and wholesale prices fall, and a smaller share when those prices rise.
Reactions & quotes
“The price of oil, which is market-determined, remains the largest and most fluid driver of pump prices,” noted Patrick De Haan, petroleum analyst at GasBuddy, describing how crude swings shape station pricing pressure.
Patrick De Haan, GasBuddy (industry analyst)
“Retail gasoline tends to track Brent rather than WTI because Gulf Coast refiners pay Brent-linked prices,” wrote Ehud Ronn of the University of Texas at Austin, explaining the benchmark linkage between international crude and U.S. retail fuel.
Ehud Ronn, McCombs School of Business, UT Austin (academic)
AAA reported a U.S. average near $3.63 per gallon on March 13, 2026, noting that regional taxes and seasonal shifts are part of why prices differ across states.
AAA (consumer data provider)
Unconfirmed
- Whether retail stations nationwide will fully pass the recent Brent-related cost increases through to consumer prices within days remains variable and market-dependent.
- Forecasts for how long Brent will remain near $100 per barrel are uncertain; market predictions vary by model and source.
- Exact station-level profit margins during this episode are reported as averages; individual outlets may experience materially different margins that are not publicly verified.
Bottom line
Crude oil is the largest single input to gasoline but explains only about half of the pump price; refining, distribution, taxes and retailer margins together account for the rest. That multi-stage structure explains why global oil shocks do not translate into equal-sized changes at the pump and why regional and seasonal factors can amplify or mute the consumer impact.
For drivers, attention to national crude trends is useful but incomplete: local taxes, refinery conditions and seasonal blend schedules often determine the price differences you see at the pump. Policymakers and analysts should therefore treat crude-market developments as the first link in a chain rather than the sole determinant of retail fuel costs.
Sources
- CBS News — Iran war and gasoline prices (news report)
- U.S. Energy Information Administration — Why gasoline prices change (U.S. government energy analysis)
- AAA Gas Prices (consumer price data)
- GasBuddy (industry price monitoring and analyst commentary)