Gas Prices Outlook
Treasury Secretary Scott Bessent informed reporters on Wednesday that gas prices might not dip below $3.00 a gallon until late September.
Since February 28, when President Trump announced a naval blockade of the Strait of Hormuz, gas prices have surged. This announcement came during a Truth social post and involved what was termed Operation Epic Fury. FOX News correspondent Peter Doocy questioned Bessent on the potential for a drop in gas prices.
Bessent noted, “President Trump mentioned that he thinks we are approaching the end. The U.S. has kept a ceasefire and has halted fire. The Strait of Hormuz hasn’t fully reopened yet, so we’ll see.” He expressed a cautious optimism, stating, “I believe we’ll see a $3 price tag on gas sooner or later this summer.”
Bessent also mentioned he had informed his counterparts in the Middle East that they could start pumping oil again within a week after the Strait of Hormuz reopens.
Doocy inquired, “So by Labor Day instead of by this summer like Memorial Day?” Bessent replied, “Again, I’m hopeful we’ll see $3 gas sometime between June 20th and September 20th. We’ll be monitoring gas stations closely since they tend to raise prices quickly when oil rises. Our hope is they will lower prices just as swiftly as they’ve gone up.”
Prices have indeed dropped notably over the past ten days, although they are still high compared to earlier in the year. Under the Biden administration, gas prices peaked at $5 in June 2022, largely attributed to policies limiting fossil fuel production and high inflation rates.
The Biden administration initially attributed these hikes to Russia’s conflict with Ukraine and accusations of price gouging. Interestingly, prices didn’t fall below $3 until after Trump took office.
Meanwhile, WTI crude oil futures closed at $91.23 on Wednesday, significantly up from the closing of $67.02 on February 27, although down from its peak of $117.63 on the 28th, according to Investing.com.
Energy analyst David Blackmon cautioned that price increases could persist for an extended period. He remarked, “There is considerable damage to infrastructure and global oil supplies. Prices won’t revert to what they were before February 28th.” Blackmon’s outlook suggests that returning to previous price levels is unlikely, which adds a layer of uncertainty to the future of gas prices.
