If the Strait of Hormuz is open, why are gas and diesel so expensive?

Despite some continued transit through the Strait of Hormuz, the critical waterway remains heavily contested and far from its pre-war operational levels, contributing to persistent high gas and diesel prices. Recent reports indicate a significant escalation in maritime hostilities, with a crude oil tanker struck by an unknown projectile off Qatar on October 6, and a further incident east of Fujairah on October 8. The UK Maritime Trade Operations (UKMTO) and the International Maritime Organization (IMO) have reported numerous attacks on vessels in the Strait and surrounding waters, with at least 16 incidents confirmed in the past ten days and nearly daily strikes occurring this month.

The global energy market's interconnectedness means that disruptions in the Strait of Hormuz significantly impact prices worldwide, even for countries less directly dependent on its crude oil flows. Beyond the contested strait, a major contributing factor to elevated fuel costs is a substantial decline in global refining capacity, which has seen a reduction of up to 10 percent. This is due to damaged Middle East refineries, Ukrainian drone attacks on Russian facilities, and a decade of underinvestment, leading to higher "crack spreads" – the difference between crude oil and refined product prices.

As of October 8, 2026, the national average for regular gasoline stood at approximately $4.36 per gallon, with diesel at around $6.28 per gallon, having hit a record high of $6.53 in late September. These elevated prices reflect a combination of ongoing geopolitical tensions, heightened shipping risks, and constrained global refining capabilities, alongside critically low distillate fuel inventories.