In a recent statement, President Donald Trump acknowledged that gasoline prices in the United States will remain elevated for the foreseeable future, without specifying how long this scenario might last.
This acknowledgment diverges from the forecasts of energy sector analysts, who predict a prolonged period of high prices potentially stretching through 2026.
The President's comments come as experts increasingly agree on a bleak outlook: the cost of fuel is likely to remain high even if some current geopolitical tensions ease in the short term.
"We are likely to see these elevated prices persist for a longer period," remarked Rebecca Babin, a senior energy trader at CIBC Private Wealth, in a statement to Yahoo Finance last week.
Her prediction is not isolated. Other experts, such as Patrick De Haan from GasBuddy, believe that even in a relatively favorable scenario—such as the full reopening of the Strait of Hormuz—gasoline prices could hover between $3.35 and $3.95 per gallon during the summer months.
A New Baseline for Fuel Costs
Current data already reflects this trend. According to the American Automobile Association (AAA), the average price of gasoline is around $4 per gallon, which is more than a dollar higher than pre-conflict levels in the Middle East.
In certain states, the situation is even more severe. In California, for instance, drivers face prices exceeding $6 per gallon, exacerbating social unrest and straining household budgets.
Experts warn that this new reality could establish a higher "floor" for fuel prices. Factors contributing to this phenomenon include damage to oil infrastructure in conflict zones, ongoing uncertainty about global supply, and some countries' tendencies to increase their strategic reserves.
"I believe the minimum price will trend higher," Babin noted, emphasizing that more governments are considering aggressively stockpiling reserves as a protective measure.
Trump: Balancing Acknowledgment and Justification
Previously, Trump had downplayed the impact of the ongoing conflict on energy prices. However, during a recent press briefing at the White House, he adopted a more realistic tone.
"I have to be honest, the stock market is at its highest right now. I thought it would have dropped by 20 or 25 percent," he remarked.
"I expected oil to surge to about $200 a barrel. But the price is quite different from what everyone anticipated," he added.
Nevertheless, the President conceded that consumers will feel the impact at the pumps. "You know what you get with that? A nuclear-free Iran," he suggested, implying that higher fuel costs are an acceptable trade-off within his administration's geopolitical strategy.
Trump also asserted that the United States maintains "total control" over the Strait of Hormuz, a crucial passage for nearly a fifth of the world's oil supply. However, he refrained from specifying how long this situation might persist or when markets might stabilize.
Simultaneously, he made it clear that he is in no hurry to reach a peace agreement with Tehran, adding uncertainty to the conflict's trajectory and its impact on global energy supply.
The "Rockets and Feathers" Phenomenon
Even if crude oil prices begin to fall, consumers will not see immediate relief at gas stations. Economists describe this behavior as the "rockets and feathers" phenomenon.
This phrase captures how gasoline prices tend to rise swiftly when crude costs increase—like a rocket—but fall much more slowly when oil prices drop—like a feather.
The St. Louis Federal Reserve has identified this pattern as a case of "asymmetric transmission," linked to market structural factors: refinery purchasing timelines, inventory management, and the need to protect profit margins amid high uncertainty.
In practice, this means drivers are often the last to benefit when tensions in the oil market subside.
This phenomenon is not new. Following Russia's invasion of Ukraine in 2022, oil and gasoline prices surged simultaneously, but the subsequent decline in crude took months to manifest at the pumps.
This situation resulted in frustration within the Joe Biden administration, which even publicly pressured energy companies to reduce prices without achieving immediate results.
Impact on the American Wallet
The rising cost of fuel is already visibly affecting Americans' daily lives. According to a national economic survey by CNBC, nearly 80% of citizens have cut back on their spending due to higher gasoline prices.
The survey, conducted among 1,000 individuals, also reveals that most expect prices to remain high for at least the next six months.
Other polls point in the same direction. Two-thirds of Americans consider gasoline prices a problem for their households, with nearly a third labeling it a serious issue.
This context also has political repercussions. A recent NBC News poll places Trump's approval rating at 37%, with 63% disapproval, in a scenario where fuel costs have become a major economic concern.
Internal Government Tensions
The uncertainty about future prices is also reflected in conflicting messages within the administration. Energy Secretary Chris Wright recently warned that gasoline might not fall below $3 per gallon until next year or even later.
However, Trump quickly dismissed this forecast as "completely wrong."
These discrepancies highlight the difficulty in predicting market developments in a context marked by unpredictable factors, such as the conflict with Iran, OPEC's decisions, and financial market responses.
A Prolonged Period of Pressure
For analysts, the conclusion is clear: even if diplomatic progress is made or supply stabilizes, gasoline prices will not quickly return to pre-crisis levels.
The combination of geopolitical tensions, shifts in global energy strategies, and market structural dynamics suggests a prolonged period of high prices.
In this scenario, American consumers will need to continue adjusting their budgets as fuel costs remain a key factor in both domestic economies and national political debates.
Understanding Gasoline Prices in the U.S.
Why are gasoline prices expected to remain high in the U.S.?
Gasoline prices are anticipated to stay high due to ongoing geopolitical tensions, damage to oil infrastructure in conflict zones, and some countries increasing their strategic reserves. Additionally, market dynamics like refinery purchasing timelines and inventory management contribute to this trend.
What is the "rockets and feathers" phenomenon?
The "rockets and feathers" phenomenon describes how gasoline prices rise quickly when crude oil costs increase, similar to a rocket, but fall much more slowly when crude prices drop, akin to a feather. This is due to market structural factors and the need to protect profit margins.
How are high gasoline prices affecting American households?
Rising gasoline prices have led many Americans to cut back on spending. Surveys indicate that a significant portion of the population views fuel costs as a major economic concern, impacting household budgets and increasing political pressure on the government.