Gas prices hit new Labor Day high

Americans faced their costliest Labor Day road trips ever as gasoline prices hit a holiday record amid ongoing oil disruptions from the Iran and Russia-Ukraine wars.

Regular gasoline averaged about $4.15 a gallon before the holiday, according to AAA. That was nearly $1 more than the same period last year and higher than the previous Labor Day record of $3.82 set in 2012.

AAA says regular gas has never topped $4 a gallon on Labor Day.

The conflict involving the US, Israel and Iran has added pressure to global oil markets. Oil shipments through the Strait of Hormuz have dropped sharply, increasing uncertainty about future fuel costs.

Brent crude rose 1.3% to $97.56 a barrel, moving closer to the key $100 mark. US West Texas Intermediate (WTI) futures gained 1.4% to $92.72. Analysts at Kotak Securities warned that any prolonged disruption to crude supplies could quickly push prices above $100. Tightening inventories and stronger refined-fuel prices are also supporting the market.

The usual trend shows that gas prices rise through spring and summer before declining around Labor Day and bottoming out in winter, when Americans tend to drive less.

But this year, Iran has constrained tanker traffic through the Strait of Hormuz since the war began in February, while Ukrainian drone attacks have disrupted Russian refineries.

Diesel is creating another burden for businesses. Its national average reached $5.85 a gallon, increasing transportation and delivery expenses that could feed into consumer prices.

In a bid to ease pump prices, cheaper winter gas blends arrived two weeks early on September 1, instead of September 15. But Iran tightening its Strait lockdown and near-full US refinery capacity could keep prices elevated.

For now, drivers can save money by checking several nearby stations before filling up, since prices often differ substantially between locations.