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Gasoline prices across the United States are climbing rapidly again after President Donald Trump rejected Iran’s latest counterproposal aimed at ending the ongoing conflict in the Middle East, triggering fresh concerns over global oil supply disruptions and sending crude prices sharply higher.

The escalating geopolitical tensions have reignited fears of a prolonged energy shock, with prediction market traders now aggressively wagering that fuel prices could surge well beyond $5 per gallon in the coming weeks.

On Sunday, Trump dismissed Iran’s proposed terms for a ceasefire and broader diplomatic agreement, calling the offer “TOTALLY UNACCEPTABLE” in a post shared on Truth Social. The statement immediately intensified concerns across commodity markets already on edge over instability in one of the world’s most strategically important oil-producing regions.

By Monday afternoon, traders on prediction platform Kalshi dramatically increased bets that gasoline prices would continue climbing nationwide. Market odds suggesting average fuel prices could exceed $5.60 per gallon surged sharply over a 24-hour period, reflecting growing anxiety about supply disruptions and rising crude oil costs.

The concerns quickly spread through global energy markets.

Brent crude futures, the international benchmark for oil prices, climbed nearly 3% to more than $104 per barrel during Monday trading. At the same time, U.S. West Texas Intermediate crude futures also jumped close to 3%, trading above $98 per barrel. Analysts say the rally reflects fears that any escalation involving Iran could disrupt shipping routes, restrict exports, or destabilize supply chains throughout the broader Middle East.

Iran remains one of the world’s most influential energy producers, and tensions involving the country often send immediate shockwaves through oil markets. Traders are particularly focused on the Strait of Hormuz, a narrow but critically important shipping passage through which roughly one-fifth of the world’s oil supply moves daily.

According to reports, Iran’s counterproposal included demands for sovereignty over the Strait of Hormuz, the lifting of economic sanctions, and the release of frozen Iranian financial assets. The proposal reportedly came after the United States pushed for stricter limitations surrounding Iran’s nuclear program and uranium enrichment activities.

Trump later added more uncertainty on Monday by stating that the U.S.-Iran ceasefire situation was “on massive life support,” further rattling investors and increasing volatility across commodities markets.

The spike in crude oil prices is already beginning to filter down to consumers.

Data from AAA showed the national average gasoline price rising approximately 6 cents over the past week to reach $4.52 per gallon. Prices are now roughly 38 cents higher than a month ago and about $1.38 higher compared with the same period last year.

Some states are already seeing prices move significantly above the national average, especially in regions heavily dependent on imported fuel or areas with higher refining and transportation costs. Energy analysts warn that if oil prices continue climbing toward $110 or $120 per barrel, nationwide gasoline prices could rise rapidly heading into the peak summer driving season.

The timing is particularly sensitive for consumers and businesses already dealing with elevated living costs, transportation expenses, and inflation pressures. Higher fuel prices typically ripple through the economy, increasing shipping costs, airline ticket prices, food transportation expenses, and manufacturing costs.

The White House appears increasingly aware of the political and economic risks tied to rising gasoline prices.

In response, Trump signaled support for temporarily reducing or suspending the federal gasoline tax in an attempt to offset some of the pressure on American drivers. Speaking to CBS News, the president said he would consider removing the tax “for a period of time” before gradually restoring it once fuel prices stabilize.

“I think it’s a great idea,” Trump said during the interview. “We’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in.”

The proposal has already received support from several congressional Republicans, though economists remain divided on whether a temporary gas tax suspension would meaningfully reduce prices in the long term. Critics argue that energy market dynamics and global crude supply disruptions would likely overshadow any short-term tax relief.

Meanwhile, financial markets are closely watching whether the geopolitical standoff escalates further. Investors fear that any direct disruption to Middle Eastern oil exports could tighten global supply conditions dramatically at a time when worldwide energy demand remains elevated.

Some analysts also note that oil inventories in several major economies have remained relatively tight despite slower economic growth in parts of Europe and Asia. That leaves less room for markets to absorb sudden supply shocks without triggering sharp price spikes.

The situation is also creating renewed volatility across broader financial markets. Airline stocks, transportation companies, and fuel-intensive industries have come under pressure as investors recalculate the potential impact of prolonged high energy prices. Meanwhile, energy producers and oil-related equities have seen renewed buying interest as traders position for a potentially extended rally in crude prices.

For consumers, however, the immediate concern remains simple: higher oil prices are increasingly translating into more expensive trips to the gas station.

With tensions between the United States and Iran still unresolved, and global energy markets reacting aggressively to every diplomatic development, many analysts believe gasoline prices could remain elevated for the foreseeable future.