A surge in global oil prices in the wake of President Trump's attack against Iran is already costing Massachusetts drivers over $2.4 million dollars a day in higher gas prices.
Average retail gasoline and diesel prices in Massachusetts have surged by 45 cents per gallon since the end of February, according to data from the Energy Information Administration.
According to state fuel tax collection data, Massachusetts drivers typically burn about 6 million gallons of gasoline a day at this time of year.
That means that this week's sudden 45-cent increase in gasoline prices has collectively cost the state's drivers an additional $2.41 million a day at the pump.
At these prices, Massachusetts drivers are now cumulatively spending $20.9 million a day on fossil fuels – more than twice as much as the daily cost of operating the entire MBTA system.*
Gasoline costs are still a relatively small portion of the total costs of driving, which also include the unpaid labor costs of sitting behind the wheel, repair costs, debt payments, insurance, plus the social costs of pollution, traffic violence, and congestion.
Dire straits
The increase in local gas prices is largely the result of an even more dramatic surge in the global price of crude oil. As of Friday morning, crude oil is trading at over $100 per barrel – 40 percent more expensive than it was at the end of February.
That's because the war in Iran has effectively shut down shipping through the Strait of Hormuz, a critical channel for roughly 15 percent of the entire planet's oil supply.
The war is also beginning to inflict damage to oil fields, ports, and refineries throughout the Persian Gulf region, making a quick return to "normal" market conditions less and less likely.
Analysts for Wood McKenzie, a research and consulting firm that specializes in global energy commodities markets, warned earlier this week that "the industry has never faced a shutdown of this scale" and that "in our view, $200 (per barrel) is not outside the realms of possibility in 2026."
*The MBTA's total budgeted operating expenses for fiscal year 2026 are $2.683 billion, which works out to $7.35 million per day.
