As the summer travel season draws to a close, Americans are confronting the most expensive Labor Day gas prices ever recorded, extending the strain on household budgets for the millions of people taking to the road over the holiday weekend.

According to AAA, nearly 40 million Americans are expected to drive during the holiday, and they will be paying unprecedented prices at the pump. The national average for regular gasoline reached $4.14 per gallon on Monday, up about 4 cents from the previous week and nearly 95 cents higher than a year ago.

If that average holds, it will shatter the previous Labor Day record of $3.82, set in 2012, and mark the first time the national average has exceeded $4 per gallon during the holiday weekend.

The unusually high prices come despite the fact that gasoline demand typically falls after the peak summer driving season. Normally, motorists begin to see relief at the pump after Labor Day as vacation travel winds down and fuel demand eases. This year, however, elevated crude oil prices tied to the conflict involving Iran have largely offset that seasonal trend.

Fighting in the region has raised concerns about potential disruptions to oil shipments through the Strait of Hormuz, a narrow waterway between Iran and Oman that carries roughly one-fifth of the world's crude oil. Those concerns have kept crude oil prices near $90 a barrel, preventing the seasonal decline in gas prices that motorists usually see after Labor Day. Because gasoline prices track crude oil, the main input cost in refined fuel, sustained pressure on oil markets tends to flow through to retail pump prices within weeks, which is why geopolitical risk in the Middle East has translated directly into what drivers pay.

While the national average stands at $4.14, prices vary significantly from state to state, reflecting differences in state fuel taxes, environmental fuel-blending requirements, and proximity to refineries. California continues to have the nation's highest average gas prices at $5.78 per gallon, followed by Washington at $5.47, Hawaii at $5.41, Oregon at $4.98, Alaska at $4.96, Nevada at $4.91, Idaho at $4.62, Arizona at $4.52, Utah at $4.42, and Montana at $4.38.

At the other end of the spectrum, Indiana has the nation's cheapest gas at $3.44 per gallon. It is followed by Texas at $3.69, Oklahoma and Mississippi at $3.71, Louisiana at $3.75, Arkansas at $3.77, South Carolina and Kansas at $3.78, Alabama at $3.79, and Wisconsin at $3.80.

For households, elevated pump prices act as a recurring cost on top of other inflation pressures facing family budgets this year, since driving is a routine expense for many workers rather than a discretionary one that can easily be cut.

Whether motorists finally see relief in the weeks ahead will depend largely on crude oil prices. If tensions in the Middle East ease and oil prices retreat, drivers could begin to see the seasonal decline in gasoline prices that typically follows Labor Day, a shift that in past years has also coincided with the switch to cheaper winter-blend gasoline in many parts of the country.

Source: Fox Business, AAA