As war in the Middle East pushes up fuel prices, Costco is seeing more demand than ever for its discounted gas.

In the third fiscal quarter, which runs from mid-February to mid-May, Costco said its gas sales set successive records, with the final five weeks of the quarter being the highest in the company’s 50-year history.

Costco stations saw so much demand over that period that trucks had to deliver gas to the same locations multiple times a day, CEO Ron Vachris said during an earnings call last month. The lower prices drove many members to use Costco gas for the first time that quarter.

The Issaquah, Washington-based warehouse club typically offers gas prices up to 30 cents cheaper per gallon than other gas stations. Costco makes little profit on gas as a result — but, like its $4.99 rotisserie chicken or $1.50 hot dog combo, the low prices attract customers willing to purchase a Costco membership to access such discounts.

Nationwide, gas prices are up 33% from a year ago, currently averaging $4.16 a gallon. Gas prices in some parts of the West Coast, including the Seattle area, can exceed $6 a gallon.

That’s because Iran retaliated against a U.S. and Israeli strike in late February by effectively blocking the Strait of Hormuz, one of the world’s busiest oil shipping channels. The blockage sent energy prices soaring, with no end in sight. While a fragile ceasefire is in place, the strait remains effectively closed.

“Against the backdrop of ongoing macro uncertainty, our focus on providing quality goods and services at the lowest possible price continues to resonate strongly with our members,” Vachris said.

“Nowhere has this been more apparent in the third quarter than our gas business … The result was record-breaking volumes.”

According to Costco executives, half of all customers who buy gas walk into a Costco store on the same trip.

“We believe this will drive even greater loyalty with these members in the future as members who use our gas stations typically spend more with us in the warehouse,” Vachris said.

Costco has 747 gas stations, which brought in 10% of its overall sales in 2025.

This past quarter, higher fuel prices boosted Costco’s overall sales by around 2.2%, according to Gary Millerchip, the company's chief financial officer.

In the third quarter, Costco’s revenue was also up 11.6% to $70.5 billion, and its net income rose 15% to $2.2 billion.

On the earnings call, Costco executives also announced that the company had cut prices on several Kirkland Signature products, in part in response to rising gas prices.

Our goal is to be the first to lower prices and last to raise them, Vachris said on the call.

Costco did not respond to requests for comment.

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