Gasoline prices are currently about 30 to 50 cents higher than usual, and even though oil prices have dropped, experts suggest it could be late fall before we see prices that resemble pre-Iran war levels.
The outlook for the gasoline market seems quite discouraging, particularly after President Trump called for an investigation by the Justice Department into major oil companies regarding these rising prices.
Brent crude oil was priced a little over $73 a barrel as of Wednesday morning, while gasoline is averaging around $3.90 a gallon across the U.S., according to recent figures from the American Automobile Association.
This is a notable decrease from the wartime peak of $4.56 a gallon, but in typical circumstances, prices would likely hover around $3.45 to $3.65, as noted by Patrick de Haan, head of petroleum analysis at GasBuddy.
Even reaching that ideal level would still represent a rise compared to last year’s average of about $3.22 per gallon, highlighting the market’s volatility.
“There’s not a direct correlation between oil prices and gasoline prices,” De Haan explained. “We may have to be patient until late fall or early winter for a return to pre-war pricing.”
The increase in prices can partly be attributed to the refining process; simply boosting oil production doesn’t mean there will be more refineries available to transform crude oil into gasoline quickly.
“You can’t just create refining capacity instantly,” De Haan remarked.
Although more ships are navigating the Strait of Hormuz, it will take time for the oil to reach the refineries and for that processed gasoline to then be delivered to consumers.
Scott Martin from Kingsview Wealth Management pointed out that various factors, including refining, transportation, taxes, and current inventories, all affect consumer gas prices.
“Gas stations usually sell fuel that was bought or refined weeks before at higher costs, so there’s a built-in lag between changes in crude oil prices and what you pay at the pump,” Martin explained.
“Usually, it takes several weeks for consumers to see lower oil prices reflected in retail gasoline rates,” he added.
Another reason for higher-than-expected prices could be suppliers attempting to recover losses experienced during March and April, when the war caused significant supply chain issues, De Haan noted.
Gasoline prices might drop to $3.50 a gallon by summer’s end as tensions between the U.S. and Iran calm down, alongside seasonal price fluctuations, potentially bringing prices below the pre-war benchmark of $3.
However, Iran has previously threatened to block the Strait of Hormuz in the midst of negotiations, suggesting that depending on the outcome of discussions, this decline may take longer—possibly extending into 2027.
On Wednesday, President Trump accused oil companies of price gouging.
He claimed, “Major oil companies have not been able to lower prices at a rate that matches the rapid drop in oil prices,” adding, “Those prices are lower than ever. Essentially, customers are being ‘gouged’.”
“I’ve instructed the Department of Justice to initiate an investigation immediately. Gas prices had better start decreasing much sooner than I observe!” he asserted.
