U.S. producer prices climbed last month at the fastest pace since November 2022, fueled by surging energy prices. The Labor Department reported Thursday that its producer price index — which captures inflation before it reaches consumers — jumped 6.5% from May 2025. It also rose 1.1% from April, same as it did the previous month. Inflationary pressures, intensified by the energy shock caused by the Iran war, are frustrating Americans five months before midterm elections that will determine whether President Donald Trump's Republicans keep full control of Congress.
The price of a gallon of regular gasoline climbed 31 cents in the past week, spiking to an average of $4.48 per gallon Tuesday, according to AAA. That's up 50% since the war with Iran began. Many drivers were hopeful in mid-April, amid signs that the conflict could be winding down, and gasoline prices fell daily for almost two weeks. But as the war continued, gasoline prices reversed course and began increasing again. And energy experts say that even once the war ends, it will take months for gasoline prices to return to prewar levels.
Profit for the two largest oil companies in the U.S. tumbled during the first quarter, a three-month period in which the price of crude and gasoline rocketed higher. It's a setback on paper only, however, the result of financial hedges that backfired after the U.S. and Israel launched attacks on Iran in late February. Exxon Mobil and Chevron reported quarterly results on Friday, with adjusted profits for both companies topping Wall Street expectations. The shares of both companies, up sharply this week, ticked higher before the opening bell.
U.S. gas prices are climbing fast, and drivers are paying the highest pump prices since 2022 as the Iran war shakes oil markets. Many drivers face wild swings between stations and even from one day to the next. The Energy Information Administration says about half the price covers crude oil, and about 20% goes to refiners. Taxes take nearly 20%. Experts say retailers earn slim margins that get tighter when prices at the pump rise. Oil prices soared when U.S. markets opened Thursday, hours after President Donald Trump's speech on continuing the Iran war in which he asked Americans for patience.
U.S. gas prices have jumped past an average of $4 a gallon for the first time since 2022 as fuel prices continue to soar worldwide amid the Iran war. According to AAA, the national average for a gallon of regular gasoline is now $4.02 — over a dollar more expensive than before the war began on Feb. 28, marking the largest monthly jump the motor club has seen on record. As drivers pay more to cover necessities like gas, many households may be forced to cut their budgets in other places. And as businesses face higher transportation costs, prices of things like groceries and other goods people buy each day could also rise.
By CATHY BUSSEWITZ, MAE ANDERSON and CHRIS RUGABER AP Business Writers
Sharply swinging oil prices have left consumers feeling the effects of the Iran war and its damage to worldwide energy production. Gasoline prices are climbing. Many people will find some of the most immediate economic pain at the pump. But not only drivers will be affected. Nearly all goods that are bought and sold must travel from where they're produced. That includes food. Those costs will climb with higher gasoline, diesel and jet fuel prices. Heating a home and cooking with natural gas are likely to cost more as the war grinds on. And the spike in oil prices will likely be a big factor for U.S. inflation. As the war continues, some experts say the price of everything could be affected.
