Full Breakdown
Impact of the Israel-Iran War on Gasoline Prices
4/1/2026, 8:46:49 AM
Surge in Gasoline Prices in Israel
As of April 1, 2026, the price of government-controlled 95 octane gasoline in Israel will increase to NIS 8.05 per liter ($9.63 per gallon), marking a 14.7% rise from the previous month. This increase, amounting to NIS 1.08 per liter, is attributed to a significant spike in global oil prices, which have surged from $70 to $110 per barrel due to the ongoing war with Iran. The Energy Ministry of Israel has noted that this is the highest price for gasoline since July 2022.
Context of the Conflict
The conflict between Israel and Iran escalated on February 28, 2026, when Israel, alongside the United States, launched military strikes against Iranian targets. This military action has disrupted global oil supply chains, particularly affecting prices in the Mediterranean region, where gasoline prices have risen by 49%. The shekel-dollar exchange rate fluctuations have also contributed to the increase in fuel costs in Israel.
Israel's Energy Landscape
Despite the turmoil, Israel has managed to maintain a degree of insulation from the energy crisis, primarily due to its substantial offshore natural gas reserves. The Tamar gas field, which produces approximately 11 billion cubic meters of gas annually, is crucial for Israel's energy security, covering nearly all domestic consumption. However, the conflict has led to the suspension of operations at the Leviathan and Karish fields, impacting exports to neighboring countries like Egypt and Jordan.
Broader Implications
The rise in gasoline prices is not limited to Israel; the United States has also seen an increase, with average prices surpassing $4 per gallon for the first time in over three years. This trend reflects the broader impact of the Iran war on global fuel costs, as geopolitical tensions continue to disrupt supply expectations. Experts warn that if the conflict persists, consumers may face further increases at the pump.
Criticism and Regional Reactions
While Israel prioritizes its energy security during wartime, this has led to regional tensions, particularly with Jordan and Egypt, which have requested the resumption of gas exports from Israel. However, Israel has reportedly rejected these requests, emphasizing its need to secure domestic energy supplies amidst the ongoing conflict.
Conflicting Reports and Future Outlook
As the situation evolves, discrepancies remain regarding the long-term effects of the war on energy prices and supply chains. While Israel's internal energy production has provided some stability, the potential for further military escalation poses risks to both domestic and regional energy security. The Electricity Authority in Israel is expected to revise electricity tariffs in June, reflecting the increased costs of alternative energy sources utilized during the conflict.
Verbatim Quotes
- “Tamar is the existential one,” — Gabriel Mitchell, Energy Security Analyst
- “Once a platform is hit by a missile, the explosion might be enormous and might be a total loss which takes years and billions of dollars to rebuild,” — Amit Mor, Senior Lecturer at Reichman University
- “It's not the shock of $5, but motorists are really going to start to see those digits go up on the dollar price on the pump relatively quickly,” — Patrick De Haan, Petroleum Analyst at GasBuddy
