Brent tops $79 after U.S.-Iran strikes as pump prices jump 15 to 16 cents in a week

Crude jumped 4% Monday in Asian trade after a weekend of U.S. strikes on Iran and Iranian claims that the Strait of Hormuz is closed again. Brent topped $79 a barrel, the highest in more than three weeks. WTI rose 4.13% to $74.36. Retail moved the same day.

If you buy rack and sell retail, this is the second month running where a chokepoint headline set your replacement cost. Physical U.S. supply was unchanged over the weekend. The futures move drove the rack.

Pump prices

South Carolina gas prices rose nearly 15 cents in a week and spiked again Monday after the strikes. Chattanooga is up more than 16 cents a gallon over the past week. Peoria is averaging $4.00 a gallon and was still rising as of Monday, per GasBuddy. Birmingham is heading back up. A few markets held flat to start the week, which is just the usual lag between the wholesale move and the sign change.

The pass-through could keep running for several days. Jobbers who bought ahead of the weekend are carrying cheaper cost than the current rack, and street prices in most markets have not fully caught the Monday rack.

Watch your margin math on the way up rather than the way down. Rising cost compresses street margin while retailers hold price to protect volume, and operators who wait a full cycle before moving can get squeezed. Credit card fees scale with the pump price too, so a 30-cent run-up quietly takes another cent or so out of every gallon before you have done anything wrong.

Diesel is the one to watch harder. It has less slack in it than gasoline does when a supply scare hits.

Hormuz

Iran's Islamic Revolutionary Guard Corps warned Monday that continued U.S. interference in the strait "could lead to greater incidents in the global oil and gas sector." Tanker traffic through Hormuz fell to a five-week low. Iran says the chokepoint is closed again.

The strait does not have to be closed to cost you money. Owners and insurers are already routing around the risk, and traffic at a five-week low is what that looks like. Every day of reduced transits pulls barrels out of the floating supply that would otherwise land in Asia, which pushes Asian buyers into the Atlantic basin, which competes for the same crude U.S. Gulf refiners buy.

European natural gas went along for the ride. Dutch TTF August 2026 futures opened 3.35% higher Monday at €59.51 per megawatt-hour, back above the 50-euro line on the threat to Middle East LNG loadings. That is not a cost U.S. buyers pay directly. It does set the pull on U.S. LNG exports, and U.S. LNG export demand is what sets the floor under Henry Hub. If you are on a gas contract that resets, this is the mechanism to keep an eye on.

Russian refining

Ukrainian drone strikes have knocked out roughly 40% of Russia's oil refining capacity, triggering fuel shortages inside Russia, according to a report this week. Ukraine's SSU says refineries and oil depots have been hit in the first week of a 40-day operation.

Read that as bullish for products more than for crude. When refining goes down but wells keep pumping, the crude has to go somewhere, so it gets exported or stored. The diesel and gasoline those plants would have made is lost to the market. Russia has already been a swing supplier of diesel to markets that would otherwise buy from Europe or the U.S. Gulf, and taking 40% of its refining offline tightens the global product balance while doing nothing to tighten crude.

That combination shows up as a wider crack spread. Germany's Schwedt refinery, which lost Russian crude some time ago, took South American oil via Poland this week, which tells you how far barrels are traveling to fill the gaps. Long-haul replacement barrels cost more, and refiners recover that in the product price.

Indiana's gas tax holiday

Indiana's gas tax holiday is generating exactly the questions you would expect. The state suspends collection, retailers pass some or all of it through, road funding takes the hit, and the pothole bill arrives later. For jobbers in the state, the immediate issue is mechanical: how the suspension applies to inventory already taxed at the rack, and how credits get handled.

The timing is unfortunate. A tax holiday that lands the same week crude runs up 4% gets swallowed by the crude move, so the relief shows up in the tax line and not on the street price. Consumers could blame the retailer for relief they do not see.

Louisiana renewable diesel

Louisiana looks set to pass California in renewable diesel and SAF capacity as carbon capture projects move forward, per BioEnergy Times. That is a real shift in where the molecules come from. California built the demand through LCFS. Louisiana is building the plants, with cheap feedstock logistics on the Mississippi and CO2 storage geology that California cannot match.

For a Gulf Coast jobber, more in-region renewable diesel production could mean better R99 availability and shorter hauls if you serve customers with low-carbon requirements. It is a two-to-three-year story, not a this-quarter story, and the capacity only pencils if the federal credit structure holds.

What to watch

Whether Hormuz transits recover this week. Transits are the number to track. Statements out of Tehran are not.

If transits normalize, the risk premium in Brent could come back out fast.

Diesel cracks. With 40% of Russian refining reportedly down and no sign the strikes stop before the 40-day operation runs its course, distillate is where the tightness could show up first.

Your own cost of carry. If crude holds above $79, the working capital tied up in a full tank goes up with it, and lines of credit sized for $65 crude get tight in a hurry.