Gas prices in Chicago have jumped to over $5 a gallon for the first time in four years — squeezing drivers who will likely see even higher prices in the coming months.
Austin resident Malik Allen was at a BP gas station Thursday, at North Wells Street and West Chicago Avenue. The Moody Bible Institute student said he’s been filling up his sedan twice a week, usually to keep his gas tank at least half full when he can.
But he dropped more than $70 at the station, where regular gas was $4.99 a gallon — two cents below the city average.
“There’s no escaping it,” Allen said.
Chicago’s average price for a gallon of regular gas on Thursday was $5.01, up from $3.75 a year ago, according to AAA. Since the U.S. and Israel launched a major attack on Iran on Feb. 28, gas prices have increased by nearly 50%. The last time gas prices reached $5 a gallon was in August 2022.
“It’s been a tremendous jump in Illinois, Indiana, Ohio and Michigan,” Patrick De Haan, head of petroleum analysis at GasBuddy, said.
Nationally, the average cost of regular gas was $4.30 on Thursday, surging 27 cents in one week. AAA said the price at the pump hasn’t been that high since July 2022, a few months after Russia invaded Ukraine.
The recent price increases are tied to Iran’s closure of the Strait of Hormuz — the narrow mouth of the Persian Gulf where about a fifth of the world’s oil passes through. Negotiations to end the war between the U.S. and Iran have stalled, and Iran’s chokehold on the vital waterway has shocked global oil supplies and prices.
It’s the largest disruption the oil industry has ever faced, according to Sam Ori, executive director of the University of Chicago’s Institute for Climate and Sustainable Growth.
“There’s never been anything in the history of the oil market that really is at the same scale as this. You’re talking about a fifth of the world’s oil supplies being disrupted,” Ori said. “There are some alternative routes, but in the best case, you’re still talking about a supply disruption of 10 [million] to 15 million barrels a day.”
The blockage impacts more than just gas prices for consumers.
“Gasoline prices are what you and I are going to complain about, but at the end of the day, it’s the price of diesel that is far more impactful to the broader U.S. economy,” De Haan said. “Everything in this economy moves with diesel.”
Seventy percent of the oil consumed daily in the U.S. is in the transportation sector, according to Ori. A spike in transportation fuel, like diesel, acts as a hidden tax on deliveries.
Consumers could also see pricier airline tickets. Chicago-based United Airlines said last week that it was considering raising ticket prices by 15% to 20% to offset the price of jet fuel that has spiked during the U.S.-Israel war with Iran.
Melissa Griffin, a 45-year-old Near North resident, tends to fill up near home because she’s found the Lake View gas stations she passes taking her son to activities have higher prices.
Griffin said gas was more than a dollar cheaper last week, which is why she doesn’t let her tank fall below three-quarters. She is also thinking about cutting her spending on other items, like food, to help recoup the money she’s putting toward gas.
“The combination of things is starting to get difficult,“ she said. “We’re gonna have to start shaving things out.”
Allen said he’s already cut back on his hobbies, like weekend trips, and finds himself reading at home more frequently.
“I choose not to do a lot of things that I used to just to save money. It’s been difficult,” Allen said. “I love reading, but summer is coming up and I’d like to enjoy that stuff. Gas prices are way too high for that to happen.”
Allen said he’s less worried as summer approaches. He plans to buy a bike and take advantage of other ways to get around the city. When asked if he thinks prices will come down, he laughed before saying a definitive “no.”
“I’d hope so, but I don’t think so,” he said. “There’s a lot of other ways to travel the city, and I’m about to invest in that.”
Since the war began, Illinois has consistently ranked in the top 10 among states with the highest gas prices. As of Thursday, Illinois was No. 8 with an average gas price of $4.66. California ranked first at $6.01.
De Haansaid several Midwest states have seen higher-than-normal increases this week.
He said it was “truly bizarre” that gas prices in Indiana and Michigan are now similar to Illinois’ prices. It’s not uncommon for drivers living near Indiana to head across state lines to fill up. As of Thursday, Indiana’s average price for regular gas was $4.42. Michigan was $4.58.
Illinois typically has higher gas prices, due to higher gas taxes. Some states, like Indiana, have implemented a gas tax holiday to combat surging prices.
“Typically with a gas tax holiday, Indiana prices should, in theory, be 40 to 50 cents lower than that of Chicago, but we’re not really seeing that at this point,” De Haan said.
He said if the Strait of Hormuz doesn’t open soon consumers are likely to pay more at the pump.
“For eight weeks, the world’s most critical route to oil supplies has been blocked, and we have a president that hasn’t really addressed the root of the problem,” he said. “There’s potentially a global looming energy crisis if this does not get addressed here in the next few weeks. … So not a lot of great news right now. And there certainly is the distinct possibility that gas prices could reach new records here in the days and weeks ahead, so long as this continues.”