The Future of U.S. Gasoline Prices Amid Middle East Conflict

The ongoing war with Iran significantly impacts gasoline prices in the United States. President Donald Trump declared that prices would “drop like a rock” once the conflict ends. On May 11, the average price for a gallon of regular gas reached $4.52 nationwide.

Despite Trump’s optimism, energy experts urge caution. Analysts predict that gas prices won’t return to pre-conflict levels soon, even if the war ends immediately. Before the conflict started, the national average gas price was $2.98 per gallon. Denton Cinquegrana, chief oil analyst at the Oil Price Information Service (OPIS), expressed doubt that Americans will see such low prices in the near future. He suggested it might take until late 2027 to return to those levels.

Current Gas Price Trends

Gas prices in the U.S. had been decreasing in the months leading up to February 28. This trend reversed after the U.S. and Israel initiated joint strikes on Iran. The conflict disrupted global oil production and supply, particularly through the Strait of Hormuz. This narrow waterway, affected by Tehran’s blockade, usually handles a fifth of the world’s oil transit. Currently, its flow has reduced significantly.

The American Automobile Association (AAA) reported that the national average gas prices are around $4.5. This is approximately $1.5 more than the prices before the start of Operation Epic Fury. In states like California, the average gas price exceeded $6 per gallon, while in Mississippi, prices were slightly below $4 per gallon.

Factors Influencing Future Gas Prices

Ending the Iran war won’t alone stabilize gas prices. Experts agree that the key factor is restoring normal oil shipment through the Strait of Hormuz. Patrick De Haan, petroleum analysis head at GasBuddy, emphasized this point, stating that reopening the Strait fully is essential.

Even with an immediate resolution, De Haan indicated a significant time would be required for prices to normalize. It could take weeks or months for oil flows to resume fully once the Strait reopens. He noted that even with a reopening today, significant stabilization in the markets might not occur until July.

While there has been some improvement in gas and oil prices recently, experts remain cautious. Adam Turnquist, Chief Technical Strategist for LPL Financial, mentioned that Brent futures continue to signal supply concerns. Although there has been a slight decrease to $80 per barrel from $88 last week, prices remain above prewar levels.

De Haan urged caution, citing the need for verified agreements and substantial oil flow to assure any substantial drop in gas prices. Until significant shipments resume, prices could remain above $4 per gallon.