Uncertain Future for U.S. Gas Prices amid Middle East Tensions

President Donald Trump promised a significant drop in gasoline prices at the conclusion of the conflict with Iran. On May 11, during remarks in the Oval Office, he predicted prices would “drop like a rock.” At that time, the nationwide average for a gallon of regular gas stood at $4.52. Despite this optimism, energy experts have expressed skepticism about a rapid decline.

Price Projections and Expert Opinions

Analysts anticipate that U.S. gas prices might not decrease to pre-conflict levels by year’s end, even if the Middle East hostilities ceased immediately. Before the onset of the Iran war, the average U.S. gas price was $2.98 per gallon. Denton Cinquegrana, chief oil analyst at Oil Price Information Service (OPIS), forecasts that such prices will elude consumers for the rest of 2026 and only potentially return in the latter half of 2027.

Current Gas Price Trends

Prior to the conflict, the U.S. experienced a progressive decline in gas prices. However, following February 28, when the U.S. and Israel initiated joint military actions in Iran, the trend reversed. Disruptions to global oil logistics and supply, particularly through the Strait of Hormuz, escalated oil prices worldwide. This narrow waterway facilitates the passage of about 20% of the world’s oil. Post February 28, the volume of oil traversing this strait drastically reduced.

This week, the national average for gas prices stabilized around $4.5, as reported by the American Automobile Association (AAA). This price is $1.5 more compared to late February, before Operation Epic Fury commenced. In regions like California, drivers are paying over $6 per gallon, while Mississippi residents enjoy rates slightly below $4 per gallon.

Mechanisms to Reduce Prices

To lower gas prices in the U.S., the resolution of the Iran conflict alone is insufficient. Experts agree that fully reopening the Strait of Hormuz is crucial. Patrick De Haan, head of petroleum analysis at GasBuddy, emphasized the importance of restoring oil shipments through the strait.

Even if this occurs, a lengthy time frame is expected before a return to pre-conflict gas prices. Cinquegrana noted that normalizing oil flows through the Strait of Hormuz would serve as an initial step. De Haan mentioned in an interview that even if the strait were accessible today, it would take several weeks, if not years, for prices to stabilize at earlier levels.

It is likely that full operations at the strait would only allow oil shipments to resume by early June, with shipments reaching international markets by July. Nonetheless, pre-conflict pricing may not return for over a year.

Recent Market Developments

Some improvements in gas and oil prices are evident over the past week, possibly sparked by optimism regarding Trump’s mention of potential peace negotiations. However, industry experts remain cautious despite minor price declines.

“Until we see an agreement signed & a significant amount of ships transit through the Strait, the national average price of gasoline will likely remain well above $4/gal,” De Haan wrote on X.

Adam Turnquist, LPL Financial’s Chief Technical Strategist, explained that global supply concerns persist despite the slight adjustments in the Brent forward curve. Current futures contracts maintain a premium over longer-term options. While Brent futures for December 2026 decreased from $88 to $80 per barrel, they still remain substantially above pre-conflict prices.