U.S. motorists will pay gas prices near four-year highs when refueling for trips over the Memorial Day long weekend, and should expect more pain this summer if the Strait of Hormuz doesn’t reopen.
The average price of gasoline on Friday was $4.55 a gallon, according to AAA, an increase of more than 50% since the U.S. and Israel began their war with Iran on Feb. 28. This is the most money drivers have paid on a Friday before Memorial Day since 2022, following Russia’s full-scale invasion of Ukraine.
Prices have fallen slightly since Thursday, when drivers paid the highest average amount since July 2022.
Oil prices have soared after Iran’s blockade of the Strait of Hormuz caused U.S. oil prices to jump more than 40% from pre-war levels. The strait connects the Persian Gulf’s major producers to global markets and is the world’s most important oil export route. Its closure caused the largest oil supply disruption in history.
Patrick de Haan, head of oil analysis at GasBuddy, said gas prices could reach $5 a gallon in June if Hormuz Island remains closed.
Oil prices fell nearly 7% ahead of the holidays this week after President Donald Trump announced he would halt an impending attack on Iran to give time for negotiations. But President Trump’s repeated promises that the war would end quickly only served to escalate tensions with Iran and send oil prices soaring again.
“The president has hinted that a lot of progress is being made, but we don’t know how many more fake heads we’ll see,” DeHaan said.
De Haan said the market needs to take verifiable and decisive steps to reopen Hormuz Island before the prospect of $5 gas disappears. The analyst said that even if Hormuz were to reopen, price increases probably would not fully normalize until well into 2027.
President Trump told reporters on Tuesday that he was not thinking “at all” about the finances of the American people as he worked to negotiate a deal with Iran.
President Trump said, “I’m not thinking about the economic situation of the American people.” “I’m not thinking about anyone. The only thing I’m thinking about is that we can’t let Iran have nuclear weapons.”
David Goldwyn, who served as the State Department’s special envoy and coordinator for international energy affairs from 2009 to 2011, said global oil inventories are dwindling rapidly and there are only four to six weeks left before buffers are depleted and prices for gasoline, diesel and jet fuel skyrocket.
Analysts say the United States is immune to the threat of actual, physical fuel shortages thanks to strong domestic production and strategic stockpiles. But Asia and Europe are competing for U.S. crude oil and refined product exports due to the loss of supplies from the Middle East, Goldwyn said. Goldwyn said this competition will put upward pressure on U.S. domestic prices.
“The reason we’re looking at $5 gasoline, we’re probably already looking at $6 diesel, but we’re probably looking at $7 diesel is because of global product competition,” Goldwyn said.
