Gas prices may not be coming down as quickly as American drivers would like.
A two-week ceasefire between the U.S. and Iran went into effect last week, inspiring hope that gas prices could start falling soon. But when Fox News host Maria Bartiromo asked President Donald Trump on “Sunday Morning Futures” whether he thought oil and gas prices could come down before the midterm elections, he said, “it could be the same or maybe a little bit higher.”
His comments came just after U.S. and Iran held peace negotiations in Pakistan over the weekend, but did not come to an agreement to end the war. The U.S. Navy then enacted a blockade of Iran ports in the Strait of Hormuz, a critical oil passageway, beginning Monday morning.
The conflict has caused major disruptions to the global oil supply chain, including the blockage of the Strait of Hormuz, driving up the price of oil. Brent crude oil, a global price benchmark, rose from around $70 per barrel before the war began to as high as $118 per barrel at the end of March. It currently sits around $97 per barrel.
When the war broke out at the end of February, the initial closure of the Strait led to the largest oil supply disruption in history, according to consulting firm Rapidan Energy.
As a result, gas prices have risen sharply around the world. The U.S. national average price per gallon is $4.12, according to AAA estimates. That’s nearly 14% higher than a month ago, shortly after the Iran war had begun.
Consumers grapple with gas at $4 a gallon
The national average price per gallon of gas hit $4 a gallon in late March — a critical psychological threshold for some consumers. About 59% of Americans said they would change their driving habits or lifestyle when gas topped $4, a March AAA survey found.
Indeed, in early April, some Americans told CNBC they had already started cutting back on driving in response to the rapid rise in prices. “I have to curtail what I would normally do in terms of driving different places, because the gas is really too expensive,” said a 70-year-old Washington, D.C. resident who primarily drives for leisure.
Without an end to the war in sight, gas prices could rise even further, analysts say.
“With a breakdown in [peace] talks and renewed escalation over the weekend, motorists should prepare for another round of price increases,” Patrick De Haan, head of petroleum analysis at GasBuddy said in a post on X on Monday morning.
A full blockade in the Strait of Hormuz will likely disrupt the global oil supply chain, De Haan said. “As a result, gasoline prices are likely to jump again this week, with diesel expected to follow, until there is a meaningful restoration of shipping through the Strait,” he said.
Patrick Penfield, a supply chain professor at Syracuse University’s Whitman School of Management, said gas prices could hit a national average of $4.30 by the end of the week.
If a peace agreement is not reached within the month, “a move toward $5 per gallon by May 15th is a distinct possibility,” Penfield said. “The longer the conflict continues, the worse gas prices will be.”
Regarding what prices could look like in November, “[It’s] hard to tell where prices will go from here,” De Haan said in an email to CNBC. “It’s all a wait and see mode when it comes to the Strait — if something is done to restore the flow, that could help oil prices down the road.”
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