Costco issues warning as gas prices surge toward $4: What shoppers should expect next
Costco warns gas prices may hit $4 per gallon
Gas prices in the United States are rising rapidly again, and retail giant Costco has issued a warning to its millions of members about what could come next.
According to new data from AAA (America Automobile Association), the national average price of gasoline recently jumped sharply, climbing nearly 27 cents in a single week to around $3.25 per gallon, with other reports putting the current average closer to $3.48 per gallon.
Experts say prices could climb even higher, potentially reaching $4 per gallon in the coming days if global oil markets remain unstable.
The surge has been linked to geopolitical tensions in the Middle East, particularly military strikes involving the United States, Israel, and Iran, which have pushed global oil prices higher and raised concerns about fuel supply disruptions.
Why Gas Prices Are Rising So Quickly
The current spike in fuel costs is being driven largely by global oil market volatility following military tensions in the Middle East.
When conflicts threaten oil supply route, particularly key passages like the Strait of Hormuz, energy markets tend to react quickly, pushing crude oil prices higher worldwide.
Even though the United States has reduced its reliance on Middle Eastern oil over the past decade, it remains connected to global markets. When supply disruptions occur in one region, prices tend to rise everywhere.
In this case, disruptions affecting Asian and European refineries are increasing demand for American oil exports, which in turn pushes domestic fuel prices upward.
Energy analysts say this interconnected market means that events thousands of miles away can quickly affect the price drivers pay at the pump.
Experts Warn Gas Could Hit $4 Per Gallon
Market analysts are already forecasting higher fuel costs in the near future.
Fuel tracking platform GasBuddy predicts that the national average could rise to between $3.50 and $3.70 per gallon if crude oil prices continue climbing.
Some energy experts believe the increase could be even sharper. A former U.S. energy adviser speaking on Squawk Box warned that Americans might see $4 per gallon gas prices within days if market volatility continues.
Higher summer demand for travel could also contribute to sustained increases through the coming months.
Costco’s Warning to Shoppers
During the company’s second-quarter earnings call, Gary Millership, Chief Financial Officer of Costco, warned that instability in the Middle East could have ripple effects beyond fuel prices.
He said prolonged geopolitical tension could increase transportation costs and disrupt global shipping schedules, which may eventually affect product prices in stores.
“The situation in the Middle East could impact fuel costs and shipping schedules if instability continues,” Millerchip explained during the call.
However, he also noted that the company currently feels confident about its inventory heading into the spring season.
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How Rising Fuel Prices Affect Household Budgets
When gasoline prices increase, the impact goes far beyond the cost of filling up a car.
Higher fuel prices raise transportation and logistics costs for businesses across the supply chain, from farmers and manufacturers to grocery retailers.
Economists often describe rising energy prices as acting like a “hidden tax” on consumers, because households end up paying more for everyday goods and services.
As transportation costs increase, companies often pass those costs on to customers through higher product prices, which can reduce consumer spending and slow economic activity.
Costco’s Strategy to Offset Rising Costs
Despite the uncertainty surrounding fuel markets, Costco says it plans to shield customers from as much price pressure as possible.
A key part of that strategy involves expanding its Kirkland Signature private label brand, which typically offers 15–20% savings compared to national brands while maintaining similar or better quality.
During the latest quarter, the company introduced roughly 30 new Kirkland Signature products, including food items like crispy wings and blackened salmon as well as apparel products.
The retailer also emphasised its commitment to lowering prices whenever possible, promising to act quickly if supply costs improve.
Some Positive News for Costco Shoppers
While fuel costs are rising, not all prices are moving upward.
According to Costco executives, inflation has actually declined slightly in certain food categories, particularly produce, dairy products, and eggs.
The company has also reported strong sales growth in eggs, partly because falling prices have made the product more attractive to consumers.
Data from the United States Department of Agriculture shows that egg supply has recovered significantly after bird flu outbreaks reduced production last year.
With more than 309 million egg-laying hens currently producing eggs nationwide, supply has improved and prices have begun to stabilize.
What Consumers Should Expect Next
Experts say fuel prices will likely remain volatile in the coming months as global markets react to geopolitical tensions and seasonal demand.
If oil supply routes remain stable, prices could level off later in the year. But continued instability in the Middle East could push fuel costs even higher.
For now, retailers like Costco say they will continue working to balance rising supply costs with value pricing, helping customers manage household budgets during uncertain economic conditions.
FAQ
Why are gas prices rising in the United States?
Gas prices are rising largely due to geopolitical tensions in the Middle East, which have pushed global crude oil prices higher. Disruptions in supply routes such as the Strait of Hormuz can affect global oil markets and increase fuel costs.
What did Costco warn about gas prices?
Costco’s Chief Financial Officer Gary Millerchip warned that continued instability in the Middle East could increase fuel costs and disrupt global shipping schedules, potentially affecting product prices in stores.
What is the current average gas price in the United States?
According to the American Automobile Association (AAA), the national average gasoline price recently climbed to between $3.25 and $3.48 per gallon, depending on the reporting period.
Could gas prices reach $4 per gallon?
Yes. Analysts from GasBuddy and energy experts have warned that gas prices could approach $4 per gallon if oil prices continue to rise and supply disruptions persist.
Why does global conflict affect US gas prices?
Oil is traded globally. Even if the U.S. produces its own oil, supply disruptions in other regions increase worldwide demand and push prices higher everywhere.
How do rising gas prices affect grocery costs?
Higher fuel costs increase transportation expenses for businesses. These costs often get passed on to consumers through higher prices for food, household goods, and other products.
Is Costco raising prices because of gas costs?
Costco says it is trying to offset rising costs by expanding its Kirkland Signature private label products, which typically offer lower prices than national brands.
Why are egg prices falling while gas prices rise?
Egg prices have declined due to improved supply. After bird flu outbreaks reduced production last year, farmers rebuilt flocks, leading to increased egg availability and lower prices.
Will gas prices stay high in 2026?
Analysts say prices could remain elevated through summer due to seasonal travel demand and ongoing global energy uncertainty.
Why is Costco gas usually cheaper than other stations?
Costco often sells gasoline at lower prices because of its membership business model, high fuel volume sales, and ability to operate on lower profit margins than many competitors.