US gas prices unlikely to normalize 2026

The Guardian reported on May 23 that U.S. drivers should not expect gasoline prices to return to prewar levels near $3 a gallon this year, even if the Iran war ended immediately. The article cited analysts who said the shock to crude supply, refining economics and fuel distribution would outlast any sudden ceasefire. AAA said the national average for regular gasoline stood at $4.529 a gallon on May 23. U.S. government and industry data show the issue is not only the war itself, but the time it takes oil and gasoline markets to rebalance after a disruption. ### Why wouldn’t a quick end to the war send prices straight back down? The U.S. Energy Information Administration said in its May 12 Short-Term Energy Outlook that Brent crude spiked to as high as $138 a barrel on April 7 and averaged $117 in April after the de facto closure of the Strait of Hormuz tightened global oil supplies. The agency said global oil inventories were expected to fall by an average of 8.5 million barrels a day in the second quarter of 2026, a sign that the market was drawing down stored crude rather than rebuilding supply buffers. (gasprices.aaa.com) The International Energy Agency said on March 20 that the Middle East conflict had triggered the largest supply disruption in the history of the global oil market, with shipping through the Strait of Hormuz affected. Even if hostilities eased, traders, refiners and shippers would still be working through disrupted flows, altered freight routes and depleted inventories, according to the agency’s description of the shock. That means retail pump prices can lag behind any improvement in headlines from the region. (eia.gov) ### How far are current pump prices from the old baseline? AAA said the U.S. national average for regular gasoline was $4.529 a gallon on May 23. Earlier in May, AAA said the national average had risen to $4.55 a gallon on May 7, up 25 cents for the second straight week and $1.40 above the level a year earlier. Those readings are well above the roughly $3-per-gallon prewar benchmark cited in The Guardian report. (iea.org) The EIA’s weekly gasoline survey, last released on May 19, provides a separate federal benchmark for retail prices and shows how closely U.S. pump prices track moves in crude and refining costs. Gasoline prices also include taxes, distribution and marketing costs, which means they do not move one-for-one with oil and often stay elevated after a supply shock. ### Didn’t the U.S. government once expect cheaper gas in 2026? (gasprices.aaa.com) The EIA said in January that it expected U.S. retail gasoline prices to fall in 2026 on lower crude prices, forecasting a 6% decline from 2025 levels. By May, however, the agency’s outlook had changed materially after the Middle East disruption, and it said monthly average gasoline prices had already peaked near $4.30 a gallon in April and would average more than $3.70 this year. (eia.gov) That shift shows how quickly a geopolitical supply shock can overwhelm earlier forecasts built on calmer oil-market assumptions. OPEC said in its May monthly oil market report that its reference basket averaged $108.79 a barrel in April, while ICE Brent averaged $102.46. Those levels remain high enough to keep pressure on refiners and fuel buyers even after the most acute phase of a disruption passes. ### What should drivers watch next? The EIA said its next weekly gasoline and diesel update will be released on May 27. (eia.gov) The agency also said its next Short-Term Energy Outlook is scheduled for June 9, while the IEA has said its next Oil Market Report will be published on June 17 with supply-and-demand forecasts extended to 2027 because of the ongoing Middle East conflict. Those reports will give the next official read on whether crude supply, inventories and U.S. gasoline prices are beginning to ease. (publications.opec.org) (eia.gov)