Gas Just Hit Its Highest Price Since 2022 — And Israel Is Bombing Tehran as You Read This

WASHINGTON, MARCH 31, 2026 —

What You Need To Know

• Gas prices hit their highest level since 2022 Tuesday — the national average reached $4.07 per gallon as Israel launched a major new overnight strike package on Tehran and cars in Israel erupted in flames from falling Iranian missile debris
• Defense Secretary Pete Hegseth confirmed he is requesting $200 billion to fund the Iran war through the end of fiscal year 2026 — a figure that would make it the most expensive military operation since the Iraq War
• Iran has played what analysts are calling its “trump card” — threatening to permanently close the Strait of Hormuz and the Bab el-Mandeb if U.S. forces land on Iranian soil, which would cut off approximately 32% of the world’s seaborne oil supply simultaneously

The number every American driver dreads crossed $4 Tuesday. The national average gas price reached $4.07 per gallon — the highest level since the summer of 2022, when post-pandemic inflation peaked and gas briefly touched $5 in some states. The milestone arrived on the same day that Israel launched its most intense overnight strike package on Tehran since the war began, Iranian missiles set cars on fire in Israeli streets, and Defense Secretary Pete Hegseth stood at the Pentagon podium to confirm he is requesting $200 billion to fund a war that was supposed to be over in four to six weeks.

Day 31 of Operation Epic Fury has produced a set of economic numbers that are, depending on your perspective, either a crisis in progress or a crisis being managed. They are certainly not the “roaring economy” the president described at his State of the Union address less than six weeks ago.

The $4 Gas Milestone — What It Means

Gas at $4.07 per gallon represents a 37% increase from the $2.98 national average that prevailed the day before the war began on February 28. The trajectory has been nearly linear — a relentless climb driven by the effective closure of the Strait of Hormuz, which normally carries 20% of the world’s seaborne oil, and the escalating threat to Gulf energy infrastructure that has sent insurance premiums on tanker voyages through the region skyrocketing.

Stanford University economists released an updated household impact estimate Tuesday: the average American family is now spending $920 more on energy this year than they were before the war began — up from the $740 estimate published last week as gas prices continue climbing. For the roughly 40% of American workers earning less than $50,000 annually, that $920 represents a meaningful reduction in real purchasing power that no tax cut or government payment program can fully offset in real time.

The $200 Billion Request — What It Buys

Defense Secretary Hegseth’s $200 billion supplemental funding request for the Iran war, confirmed Tuesday, represents the largest single military spending request since the early years of the Iraq War. It covers the cost of munitions that have been expended at a rate that surprised even Pentagon planners — the United States has dropped more precision-guided munitions in 31 days of the Iran war than it fired in the first three months of Operation Iraqi Freedom in 2003.

The request also covers the cost of the military buildup now underway: two Marine Expeditionary Units totaling approximately 4,500 Marines and sailors, the 82nd Airborne deployment, additional naval assets including a second carrier strike group, and the logistical infrastructure required to sustain extended operations in one of the most challenging operational environments the U.S. military has entered since Vietnam.

Whether Congress will approve the $200 billion — with a DHS shutdown still unresolved, a stock market in correction territory, and 8 million Americans having just marched in the street — is genuinely uncertain.

Iran’s Trump Card — The Bab el-Mandeb Threat

The most alarming new development in the war’s economic picture emerged Tuesday from an unnamed Iranian military source quoted by the Tasnim news agency. Iran, the source said, can open “a new front at the mouth of the Red Sea” if military action takes place on “Iranian islands or anywhere else in our lands.” The Bab el-Mandeb Strait — the narrow waterway between Yemen and Djibouti through which approximately 12% of the world’s trade passes before entering the Suez Canal — is the chokepoint that Iran’s Houthi allies control.

If both the Strait of Hormuz and the Bab el-Mandeb are effectively closed simultaneously, approximately 32% of the world’s seaborne oil supply and a significant share of global container shipping would be disrupted at the same time. CNN’s analysts described this as Iran playing its “trump card” — the threat whose invocation would fundamentally alter the war’s strategic calculus and whose execution would produce economic consequences that dwarf everything the past 31 days have delivered.

The Bab el-Mandeb threat is why Gulf allies are privately urging the United States not to land troops on Iranian soil. It is why the April 6 deadline carries a weight that goes beyond oil fields and nuclear facilities. And it is why, on the same day gas crossed $4, the Pentagon is war-gaming not just what happens if it seizes Kharg Island — but what happens to the global economy if Iran decides to answer by closing the Red Sea.

What This Means For You

April 6 is six days away. The ceasefire talks are ongoing — or not ongoing, depending on which government you ask. The Marines are positioned. The planes are flying. And the gas station near your house now has a number on its sign that hasn’t been there since the summer your household budget was last this stretched.