If you filled up your tank recently, you probably winced. Gas prices nationally sit at roughly $4.11 per gallon, and Los Angeles drivers are already paying well over $5.00. For most people, that is an inconvenience. For small business owners, it is a direct hit to the bottom line.
Whether you run a delivery service, a food truck, or a consulting firm that requires driving across the city, rising fuel costs eat into your margins fast. So why are prices climbing? And where are they headed for the rest of 2026?
The answer involves stalled diplomacy, one of the world’s most critical waterways, and a Goldman Sachs forecast that should have every business owner paying attention.
The Iran Peace Talks Have Stalled
For months, back-channel negotiations between the United States and Iran showed slow but real progress. The talks covered Iran’s nuclear program, regional security, and critically, the free flow of oil through the Persian Gulf.
Then, President Trump cancelled a planned envoy trip to Pakistan, widely seen as a stepping stone to broader Middle East diplomacy. Most foreign policy analysts read the cancellation as a response to Iran’s refusal to agree to preconditions on its nuclear enrichment program, combined with increased Iranian military activity near the Strait of Hormuz.
What Iran Proposed
Iran responded with a new offer: guaranteed safe passage through the Strait of Hormuz in exchange for sanctions relief and a modified nuclear deal. The current administration rejected the proposal outright. The result is a diplomatic stalemate, and stalemates in the Middle East have a way of showing up at your local gas station.
Why the Strait of Hormuz Controls Your Gas Prices
Most Americans have never heard of the Strait of Hormuz. However, this narrow waterway between Iran and Oman carries roughly 20% of the world’s oil supply every single day. Around 21 million barrels of crude oil from Saudi Arabia, Iraq, Kuwait, the UAE, and Qatar all pass through this corridor to reach global markets.
Right now, Iran has increased naval patrols in the area. Shipping companies are rerouting vessels and adding risk premiums. Insurance costs for tankers transiting the Strait have skyrocketed. None of this represents a full blockade, but the uncertainty alone pushes prices higher.
Think of it this way. Imagine the 405 freeway is the only road supplying every gas station in Los Angeles. Even occasional, unpredictable roadblocks would cause every station to raise prices, simply because no one knows when the next delivery is coming. That is exactly what is happening in the Strait of Hormuz right now.
Goldman Sachs Forecasts $90 Per Barrel
Goldman Sachs recently projected Brent crude could hit $90 per barrel by late 2026 if tensions persist and OPEC maintains its production discipline. For context, oil traded between $75 and $80 per barrel earlier this year.
Every $10 increase in crude prices adds roughly 25 to 30 cents per gallon at the pump. In California, where taxes and regulations already inflate prices, the impact runs even higher.
What That Means for Your Business
Consider a small business running five delivery vans, each using 15 gallons per day. A 30-cent per gallon increase adds $22.50 per day, which comes to over $8,000 per year in additional fuel costs alone. Add rising shipping rates, packaging costs, and petroleum-derived materials, and the pressure compounds quickly.
If you have client contracts locking you into fixed pricing for the rest of 2026, you could find yourself losing money on every transaction.
What to Realistically Expect at the Pump
Prices dropping below $3.00 per gallon anytime soon is unlikely. The forces pushing prices up, stalled talks, Strait of Hormuz tensions, OPEC cuts, and steady demand growth, are structural and slow to resolve.
Nationally, expect prices to range between $3.80 and $4.50 per gallon for the rest of 2026, with potential spikes above $5.00 if tensions escalate. In California, prices will likely hold between $4.50 and $5.50, with a worst-case scenario approaching $6.00.
The smart move is to plan for higher costs, not hope for lower ones.
How Rising Fuel Costs Create Legal Risk for Small Businesses
Gas prices are not just an operational headache. They trigger a cascade of business risks that many owners do not see coming until it is too late.
Contract Risk
If you signed a fixed-price service agreement months ago, and your costs have since jumped significantly, you may be locked into losing money. Without price adjustment clauses or cost escalation language in your contracts, you have little recourse.
Cash Flow and Partnership Risk
Squeezed margins mean less cash on hand, which makes it harder to pay vendors on time and can trigger breach of contract claims. Additionally, if your business has partners or investors, rising costs often spark disputes about how to share losses or whether to restructure. Without a clear operating agreement addressing these scenarios, small disagreements can escalate into expensive ones.
At Carbon Law Group, we help small businesses across Los Angeles review contracts, add protective language, structure proper business entities, and build operating agreements designed to handle volatile market conditions. The businesses that survive rising costs are the ones that prepare in advance.
Take Action Before the Next Price Spike
If you have not had a legal review of your business recently, now is the time. Contact Carbon Law Group today to schedule a consultation. We will review your contracts, assess your exposure, and help you build a business that can weather whatever comes next.
Take the next step book your consultation today, and safeguard your brand’s future.
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