If you thought gasoline prices were moving higher this week, you’d be right. But why there were upward pressures on prices may surprise you.It’s true that prices in the United States had fallen about 17% to under $3.80 nationally from their mid-May peaks into the Fourth of July holiday, and the big reason for the decline was that the United States and Iran seemed interested in bringing their conflict to a halt.That stopped when Iranian drones hit a series of tankers trying to pass through the Strait of Hormuz. The Trump Administration promptly retaliated, and President Donald Trump declared the ceasefire, signed on June 17, dead. Related: As Middle East tensions explode, oil and gas prices resetSo, prices moved up. GasBuddy’s price was $3.853 per gallon on July 10, up 3.6% since bottoming on July 5. The price was down 15.6% from its May 20 peak — but still up nearly 37% for the year.AAA’s national average on July 10 was $3.884, up 2.1% from the July 5 low and also up nearly 37% in 2026. The price increases came even as the Trump Administration vaguely threatened gas station operators if they didn’t start cutting prices.Possible new peace talks trim oil gains Crude oil, meanwhile, jumped a combined 7.3% on July 7 and 8 before slipping back to $75.22 per 42-gallon barrel on July 10. The price decline came as White House said July 10 that Iran and the United States will start to talk again about a permanent peace. But the U.S. won’t adhere to a ceasefire. Axios said a new round of talks may start next week, “possibly in Switzerland.”Nonetheless, crude oil was up 4.3% for the week, according to Wall Street Journal data.More Oil & Gas:The Meta Effect, Semis Surge, Wall Street Says, ‘What War?’JPMorgan resets oil price target for rest of 2026Boockvar on Oil, Commodity Stockpiling, SushiAnother war affects oil pricesBut a second issue is now adding to the pressures on oil prices and motor-fuel prices. Ukraine’s recent drone attacks on Russian oil refineries have been so successful that they have triggered a widespread fuel crisis in Russia. Gasoline shortages and rationing in multiple regions have forced motorists to wait for hours to fill their tanks.If there is any fuel available.That’s an astonishing situation given that Russia has 80 billion barrels of proved oil reserves, 9th most in the world.The drone attacks have damaged refineries outside Moscow, Russia’s capital. Two drones set two oil tankers ablaze in the Sea of Azov, a small body of water just north of the Black Sea.
Smoke rises from a Ukraine drone attack on a Moscow, Russia, oil refinery. Getty ImagesAFP via Getty Images
Another drone attack in the last week even hit a refinery in Omsk, in western Siberia. Omsk is 2,240 kilometers east of Moscow. That’s about 1,400 miles, the distance from New York to Dallas, Texas. The situation is so bad that Russia is now importing refined gasoline from India, Jeff Currie, a senior advisor to the Carlyle Group, told CNBC on July 10. Russia’s economy has proved to be vulnerable to refinery attacks, Currie said. Its refineries and the pipelines servicing them were developed during the Soviet era. Each refinery gets its oil from a sole pipeline. So, if a pipeline is broken to refinery, supply can’t be rerouted, Currie added.The result is the shortages not seen in the United States since the 1970s.Related: Starbucks tries something it failed at before