finance
US Gas Prices Rise 47%, Q1 Economy Grows 2%
US gasoline prices have risen sharply to $4.30 per gallon since the Iran war began on February 28, marking a 47% increase. The economy expanded at a 2% annual rate in the first quarter of 2026, though inflation accelerated. Gulf states are reassessing security ties, with some deepening partnerships with Israel following attacks.
IA
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US average gasoline prices have climbed to $4.30 per gallon, up from $2.98 before the Iran war began on February 28, representing a 47% increase. This surge is hitting consumers at the pump, with prices expected to exceed $5 in coming weeks. The rise follows disruptions in tanker traffic through the Strait of Hormuz.
The US economy grew at a 2% annualized rate in the first quarter of 2026, according to government data. This period included the initial weeks of the Middle East conflict, which began driving up energy prices. Core inflation rose 3.2% year-over-year in March, coming in hotter than expected.
Layoffs in the US fell to a 55-year low during the quarter. Grocery prices are beginning to increase as higher transportation costs ripple through the supply chain. The energy crunch stems from the attack on Iran and subsequent disruptions. The New York Times reported that gross domestic product expanded at a 2% annual rate in the first three months of the year.
The Washington Post noted that the economy picked up pace but inflation jumped. The New York Post added that the growth occurred as layoffs plunged.
Arab states are reassessing their security partnerships following the US-Israeli war on Iran and Tehran's retaliatory missile and drone attacks on Gulf Cooperation Council members. While defense ties with Washington remain, some states are seeking broader options to gain autonomy.
This trend predates the February 28 conflict but has accelerated due to perceived US disregard for Gulf warnings against attacking Iran.
“Historically, we have noticed that most Gulf countries courted Israel in order to get closer to the Americans." — Karim Emile Bitar, lecturer in Middle East Studies at Sciences Po Paris (Responsible Statecraft). Israel is emerging as a potential security partner for some Gulf states, leveraging its military technology and intelligence capabilities. Analysts note that this could position Israel as a necessary ally, exploiting fears of Iran. Gulf monarchies differ in their approaches, with the UAE leading in deepened cooperation. Israel secretly deployed an Iron Dome system to the UAE early in the war, intercepting dozens of Iranian missiles, according to Axios as cited in sources. This marked the first use of the system outside Israel or the US. The UAE has invested significantly in its relationship with Israel and may expand defense and intelligence sharing.”
