Gas Prices Hit $4 a Gallon as Iran Conflict Rattles Oil Markets

Shipping traffic through the Strait of Hormuz has slumped and inflation fears are creeping back as the U.S.-Iran conflict grinds on

The national average price for a gallon of regular gasoline climbed back to $4 last week, up 13 cents in seven days, as fighting between the United States and Iran keeps crude oil markets on edge, according to AAA and CBS News.

The increase is squeezing household budgets just as economists warn that broader inflation pressures could return. Analysts told CNBC that inflation fears are back in the spotlight because the Middle East conflict has kept oil prices elevated, complicating the outlook for consumers and the Federal Reserve alike.

A key driver is disruption to shipping in the Strait of Hormuz, the narrow waterway through which roughly a fifth of the world's oil passes. Vessel traffic through the strait has slumped since a blockade tied to the conflict took effect last week, CNBC reported, straining one of the world's most important oil corridors and adding a risk premium to crude prices.

Severin Borenstein, a professor at the University of California, Berkeley's Haas School of Business, said the pain at the pump is a direct consequence of the geopolitical standoff, according to CBS News. With gas prices rising for a second consecutive week, household spending on fuel is eating further into budgets already strained by higher costs elsewhere.

Economists are watching closely to see whether the disruption proves temporary or signals a longer period of elevated energy costs. A sustained rise in oil prices would ripple through transportation, shipping and manufacturing costs, potentially reigniting the kind of broad price pressures that have weighed on American consumers and businesses in recent years.

— Compiled from reporting by CNBC and CBS News.