We’ve seen this story before. The last time gasoline prices rose like this was 2022, when Russia invaded Ukraine. Now the U.S. and Israel attacked Iran and we’re back to escalating fuel prices clobbering the global economy.
Here’s what I mean…On February 23, 2026, the average price of a gallon of gasoline in the U.S. was $2.97. On March 17, 2026, the average price of gallon of gasoline jumped to $3.79.
That’s a huge 28% increase in less than a month. And it echoes what happened in 2022.
The average cost of energy jumped 22% year over year in 2022, according to the U.S. Energy Information Administration (EIA). And it sent U.S. inflation over 9% for the first time since 1981.
Most of that price increase came from transportation. For example, the price of jet fuel jumped from $1.22 per gallon in 2020 to $3.25 per gallon in 2022. That means a full load of aviation gas for a 747 jumped from $61,000 in 2020 to $162,500. The airlines have no choice but to pass on that additional $100,000 per flight to customers.
Our deliveries are also facing higher trucking costs. The average price of diesel fuel jumped $1.34 per gallon in the past month. That’s a 36% increase that companies simply can’t afford to pay themselves. That’s going to hit us everywhere, from our grocery stores, department stores, Amazon shipments, etc. And it may not be a huge increase, but it is another form of inflation.
That’s another parallel to 2022…companies like UPS, FedEx, and airlines now add fuel surcharges to offset the rising fuel costs. That’s an immediate and hidden source of inflation.
The market recognized this problem, as you can see in this chart of the S&P 500 Air Freight and Logistics Industry Index:
Shares are well off their February 2026 highs. And if the oil price continues to rise, we can expect this to continue to fall.
If we look back at this group in 2022, you can see it fell 30%:
A similar decline today would push the Index down to 700.
One inflationary pressure that isn’t subtle is our daily commute costs. Soaring gasoline prices clobbered us. About 115 million Americans still drive to work. The additional cost (from February 2026 to today) adds up to about $118 million per workday. That’s overt inflation. And as I just filled up my tank, I can tell you…it stings.
Dr. Patrick Penfield, a professor of supply chain practice at Syracuse University, told the Associated Press that fuel prices account for 50% to 60% of the total operating cost of moving goods by ship. That’s why higher fuel prices have a huge effect on the industry.
This will have a significant impact on the U.S. economy. If gasoline prices stay this high, they could push monthly inflation up as much as 1% in March. That would be the highest monthly increase in four years. And it could push the annual inflation rate over 3%.
Our takeaway is simple – review your positions. Understand that transportation stocks could be in for more pain in the short term. And they could be a good sector to bargain hunt once things in Iran calm down.
