U.S. Gasoline Prices Remain Elevated After Iran Conflict

The national average price for gasoline stood at $4.55 per gallon on May 22, about $1.50 higher than levels recorded before the U.S. and Israel began military operations against Iran in late February. Analysts said prices are unlikely to return to the pre-conflict average of roughly $3 per gallon this year even if hostilities end immediately.

Restoring normal supply flows would require reopening the Strait of Hormuz, assessing damage to Persian Gulf infrastructure, and restarting refineries. Industry estimates for full price normalization range from six months to two years. About 20 million barrels of oil per day, representing 25 percent of global seaborne crude trade, currently remain off the market because of the closure.

Gasoline and diesel prices have stayed near recent highs while jet-fuel prices have eased slightly. Airlines have reduced flights and shifted to alternative fuel sources to manage costs. AAA projects 45 million Americans will travel at least 50 miles from home during the Memorial Day weekend, which could set a new record despite elevated fuel costs.

If the strait reopens soon, summer prices might settle in the mid-to-upper $3 range; continued closure could push averages toward or above $5.