How high will US gas prices get in 2026?
Short Answer
Both the model and the market expect US gas prices to get above $4.20 in 2026, with no compelling evidence of mispricing.
1. Executive Verdict
- Since last update (~30d): The market's edge for prices above $6.80 flipped, rising +6.0pp, market-led.
- The model's edge for prices above $5.20 flipped, dropping -10.2pp, model-led.
- The model decreased conviction for prices above $4.60 by -36.0pp, widening its model-led edge.
- Confidence decreased by -1.0pp, and the "Above $4.00" outcome was removed.
- Prices are expected above $4.40 given projected H2 2026 crude flow tightness.
- Historically low Strategic Petroleum Reserve levels contribute to potential price spikes.
- A $5.40 price level may occur if geopolitical tensions escalate in H2 2026.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Above $4.80 | 27.0% | 23.5% | EIA projects tighter crude flows and higher price risk in second half of 2026. |
| Above $5.00 | 22.0% | 19.3% | EIA projects tighter crude flows and higher price risk in second half of 2026. |
| Above $6.00 | 10.0% | 9.0% | Escalating geopolitical tensions and collapsing diplomatic deals pose a high-impact tail risk. |
| Above $4.60 | 37.0% | 32.1% | EIA projects tighter crude flows and higher price risk in second half of 2026. |
| Above $5.20 | 20.0% | 17.6% | EIA projects tighter crude flows and higher price risk in second half of 2026. |
Current Context
EIA projects 2026 average retail gasoline prices at $3.70/gallon. The U.S. Energy Information Administration's (EIA) June 2026 Short-Term Energy Outlook forecasts U.S. retail gasoline prices to average $3.70 per gallon for the year 2026, subsequently easing to $3.46 per gallon in 2027 [^][^][^][^][^]. This figure represents an annual average, not a monthly peak [^][^][^][^]. The EIA is identified as the most authoritative source for U.S. fuel price outlooks in the available data, and no other source provides a higher or more specific 2026 U.S. gas-price ceiling [^][^][^][^][^].
Geopolitical conflict significantly impacted early 2026 gasoline prices. National averages were reported around $4.00–$4.50 per gallon in May and June 2026, primarily driven by the conflict in Iran and the associated blockade of the Strait of Hormuz [^][^]. Earlier 2026 projections had anticipated prices dropping toward $3.00 per gallon; however, these forecasts were revised upward due to first-half geopolitical disruptions [^][^]. The market sentiment shifted following the June 17, 2026 signing of a US-Iran deal, which initiated the physical reopening of the Strait of Hormuz and reduced the "war premium" on oil prices [^]. This caused gas prices to decline from around $4.50 to $3.90 per gallon [^].
Price normalization faces lag, limited by low Strategic Petroleum Reserve. While price pressures may ease in the second half of 2026, experts anticipate a substantial "normalization lag," making a return to pre-conflict price levels (approximately $3.00 per gallon) unlikely before 2027 [^][^]. The Strategic Petroleum Reserve (SPR) has served as a buffer, but its inventory is near 340 million barrels, its lowest level since 1983. This limits the government's capacity to further dampen future price spikes if geopolitical stability falters [^][^][^].
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This contract has shown a clear downward trend since its inception, moving from a 50.0% starting probability to a current price of 37.0%. The market's price range has been established between 32.0% and 54.0%. Two significant, news-driven drops define the recent price action. On June 14, 2026, the probability fell 8.0 percentage points, from 49.0% to 41.0%, on reports of diplomatic progress toward a US-Iran deal. A larger 10.0 percentage point drop occurred on June 24, 2026, from 43.0% to 33.0%, as an interim US-Iran deal reportedly became effective, increasing oil supply flows.
The price action suggests that the probability of high gas prices in 2026 is viewed as diminishing. The market has found a floor around the 32.0%-33.0% level, which may serve as technical support, having bounced to 37.0% more recently. The initial 50.0% level now appears to be a point of resistance. The overall downward trajectory indicates that market sentiment has shifted, pricing in a lower risk of price shocks, primarily due to geopolitical developments easing supply concerns. This sentiment aligns with the U.S. Energy Information Administration's forecast, which projects an average 2026 retail price of $3.70 per gallon. Total volume of 13,305 contracts suggests consistent market participation.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
Outcome: Above $4.60
📉 June 24, 2026: 10.0pp drop
Price decreased from 43.0% to 33.0%
What happened: The primary driver for the market drop was news surrounding a US-Iran interim deal, which became effective and was attributed to increasing oil supply flows and a sustained decline in US gas prices below $4.00 per gallon in late June 2026 [^][^][^][^][^][^][^][^]. This significantly reduced the likelihood of prices reaching "Above $4.60" in 2026, a sentiment further solidified by the EIA's June 2026 forecast predicting average prices of $3.70/gal and below $3.10/gal by year-end, well below the threshold [^][^][^][^]. No specific social media activity or viral narratives were identified as drivers for this price movement in the provided information. Social media was irrelevant.
Outcome: Above $5.20
📈 June 19, 2026: 9.0pp spike
Price increased from 13.0% to 22.0%
What happened: Despite a U.S.-Iran peace deal on June 19, 2026, which saw gas prices fall below $4.00 [^], the prediction market for "Above $5.20" spiked, likely driven by social media amplifying skepticism about long-term relief. President Trump and other influential accounts highlighted persistent consumer frustration over perceived insufficient price drops and previously warned prices might remain high through the midterm [^]. These viral narratives, coinciding with expert warnings from late June 2026 about residual war damage and slow shipping keeping prices elevated for months [^], likely fueled a belief that relief would be temporary. Therefore, social media was a primary driver, accelerating the spread of skepticism against the apparent de-escalation.
Outcome: Above $5.00
📉 June 14, 2026: 11.0pp drop
Price decreased from 29.0% to 18.0%
What happened: The primary driver for the 11.0 percentage point drop on June 14, 2026, was the diminishing risk of high gas prices due to ongoing diplomatic progress towards a US-Iran deal [^]. These June 2026 diplomatic developments lessened the war premium on oil and reduced the likelihood of disruptive events like the closure of the Strait of Hormuz, which previously fueled expectations for prices above $5.00 [^][^]. News related to the deal appeared to coincide with falling gas prices, with the national average dropping below $4 a gallon [^]. Social media activity was irrelevant as a primary driver based on the available information.
Outcome: Above $5.40
📈 June 13, 2026: 11.0pp spike
Price increased from 17.0% to 28.0%
What happened: The provided research does not contain direct evidence of specific social media activity, traditional news, or market structure factors that directly caused the 11.0 percentage point spike on June 13, 2026. While gasoline prices increased by 40.5 percent over the 12 months ending May 2026 [^] and growth expectations surged in April 2026 [^], these are general trends rather than a specific trigger for a spike on that exact date. Furthermore, later in June, US gasoline prices began trending downward following a diplomatic agreement with Iran, with national averages falling below $4.00 per gallon [^][^][^][^]. Therefore, social media activity was irrelevant as no posts or viral narratives correlating with the price movement on June 13 were identified.
4. Market Data
Contract Snapshot
This market resolves YES if AAA reports that the maximum national average regular gas price in the US exceeds $4.60 at any time from the contract's issuance through December 31, 2026; otherwise, it resolves NO. The outcome is verified by data from AAA (gasprices.aaa.com). If the YES condition is met, the market closes at 10:15 am, 11 am, or 3 pm ET following the event; otherwise, it closes by 1:25 am EST on December 31, 2026.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Last trade probability |
|---|---|---|---|
| Above $4.60 | $0.37 | $0.64 | 37% |
| Above $4.80 | $0.27 | $0.74 | 27% |
| Above $5.00 | $0.23 | $0.78 | 22% |
| Above $5.20 | $0.20 | $0.81 | 20% |
| Above $5.40 | $0.17 | $0.84 | 17% |
| Above $5.60 | $0.15 | $0.86 | 14% |
| Above $5.80 | $0.12 | $0.89 | 12% |
| Above $6.00 | $0.10 | $0.91 | 10% |
| Above $6.40 | $0.10 | $0.91 | 10% |
| Above $6.20 | $0.09 | $0.92 | 9% |
| Above $6.80 | $0.09 | $0.92 | 8% |
| Above $6.60 | $0.08 | $0.93 | 7% |
| Above $7.00 | $0.07 | $0.94 | 6% |
Market Discussion
Traders on Kalshi are discussing whether US gas prices will reach above $4.60, $4.80, or $5.00 in 2026, with current probabilities at 37%, 27%, and 22% respectively. Arguments for higher prices include observations of high regional prices (e.g., "$6.59 already") or a belief that current prices are artificially inflated. Conversely, those betting against higher prices predict a decline, with one trader explicitly stating they "don't see it" surpassing $5.00, and another vaguely noting an "open straight" for oil flow.
5. Given historically low inventory, what price level or supply shock would prompt the U.S. government to authorize further SPR releases in H2 2026?
| March 2026 SPR Release | 172 million barrels [^][^][^] |
|---|---|
| SPR Level Mid-June 2026 | Record lows since early 1980s [^][^] |
| Gas Price After Deal | Below $4 a gallon (first time since March) [^] |
The U.S. Strategic Petroleum Reserve (SPR) has faced historic drawdown. Established after the Arab oil embargo of the early 1970s, the SPR has historically been utilized in response to significant supply disruptions and increasing fuel prices [^]. In March 2026, a substantial release of 172 million barrels from the SPR was authorized as part of a larger 400-million-barrel coordinated action by IEA nations [^]. This action aimed to stabilize oil markets amidst a conflict with Iran and the closure of the Strait of Hormuz, which had caused U.S. gas prices to rise considerably [^][^][^][^][^]. By mid-June 2026, this extensive drawdown pushed SPR levels to historic lows, not observed since the early 1980s [^][^][^].
A potential U.S.-Iran deal may reduce immediate SPR needs. As of June 2026, a prospective agreement between the U.S. and Iran, aimed at ending the conflict and reopening the Strait of Hormuz, is expected to reduce the immediate necessity for further emergency oil releases [^]. Following news of this agreement, U.S. gas prices dropped below $4 a gallon for the first time since March [^]. While prediction markets in June 2026 show strong confidence (over 90%) that national average U.S. gasoline prices will exceed $4.00 by year-end, with varying probabilities for higher thresholds like $4.60 to $5.00 depending on geopolitical developments [^][^][^], the available information does not specify the exact price point or type of supply shock that would trigger additional U.S. government SPR authorizations in the second half of 2026 [^]. This is particularly relevant given the already low SPR inventory levels [^][^][^].
6. How do the H2 2026 crude oil price forecasts from the EIA and OPEC differ in their assumptions about global supply and demand?
| EIA 2026 Global Oil Demand Change | Decrease of 1.1 million b/d [^][^][^][^][^][^] |
|---|---|
| OPEC 2026 Global Oil Demand Growth | 1.0 million b/d [^][^][^][^][^][^] |
| OPEC 2026 Non-DoC Liquids Production Growth | 0.6 mb/d [^][^][^] |
The U.S. Energy Information Administration (EIA) and OPEC present contrasting views on global crude oil supply and demand for 2026. While both organizations offer perspectives on market dynamics, the provided research does not include specific H2 2026 crude oil forecast price numbers from either entity [^][^][^][^]. Consequently, it is not possible to determine the magnitude of any projected price difference between their outlooks.
EIA anticipates decreased demand and disrupted supply for H2 2026. As of June 2026, the EIA projects a global oil demand decrease of 1.1 million barrels per day (b/d) for 2026, largely due to high fuel prices and supply disruptions [^][^][^][^][^][^]. Furthermore, the EIA forecasts a significant fall in global oil supply throughout 2026, citing disruptions such as the closure of the Strait of Hormuz. Although shipments are assumed to resume in the third quarter of 2026, pre-conflict traffic levels are not expected until early 2027, suggesting tighter crude product flows and increased price risk across much of H2 2026 [^][^][^][^][^][^][^].
OPEC projects demand growth and increased non-DoC liquids supply. In contrast to the EIA, OPEC forecasts global oil demand growth of 1.0 million b/d for the same 2026 period [^][^][^][^][^][^]. On the supply side, OPEC's analysis focuses on non-Declaration of Cooperation (DoC) liquids production, projecting a growth of 0.6 mb/d, while continuously monitoring DoC crude output adjustments [^][^][^]. The available dataset, however, does not include explicit OPEC forecast tables, text, or H2 2026 assumption language specifically regarding crude oil prices [^][^][^][^].
7. What do WTI and Brent crude oil futures contracts for late 2026 delivery indicate about market expectations for year-end energy prices?
| WTI Crude Oil (Dec 2026 Futures) | USD 70.63/bbl [^] |
|---|---|
| Brent Crude Oil (Dec 2026 Futures) | USD 75.35/bbl [^] |
| Probability US Gas > $5/gallon (by Dec 2026) | 22% [^] |
Late 2026 crude oil futures suggest moderate price declines. December 2026 WTI crude oil futures contracts are currently trading around USD 70.63/bbl, while Brent crude oil futures for the same period are priced at approximately USD 75.35/bbl [^]. These figures indicate a market expectation of a moderate decline from mid-2026 price levels, characterized by a flattening futures curve and mild backwardation [^].
Despite futures, analyst forecasts for late 2026 prices remain highly uncertain. Institutional analyst predictions for year-end 2026 energy prices show significant dispersion [^]. For example, major financial institutions like UBS anticipate Brent crude near USD 90/bbl, attributing this to persistent supply disruptions, particularly those through the Strait of Hormuz [^]. In contrast, other analysts project lower prices, citing soft underlying supply-demand fundamentals [^]. Further illustrating this market uncertainty, prediction markets on Coinbase regarding US gasoline prices also show notable dispersion for 2026 [^]. The market currently indicates a 22% probability that the national average regular gasoline price will exceed USD 5.00/gallon at some point before December 31, 2026 [^].
8. What are the most reliable public sources for tracking weekly changes in the U.S. Strategic Petroleum Reserve and commercial crude inventories through 2026?
| U.S. Commercial Crude Oil Inventories | 412.1 million barrels (week ending June 19, 2026) [^][^][^][^][^][^] |
|---|---|
| Commercial Crude Inventory Change (WoW) | -6.1 million barrels (week ending June 19, 2026) [^][^][^][^][^][^] |
| Strategic Petroleum Reserve (SPR) Level | 332.0 million barrels (week ending June 19, 2026) [^][^][^][^][^][^] |
The U.S. Energy Information Administration's (EIA) Weekly Petroleum Status Report (WPSR) reliably tracks U.S. weekly petroleum changes. This report is recognized as the primary and most reliable public source for monitoring weekly shifts in the U.S. Strategic Petroleum Reserve (SPR) and commercial crude oil inventory data, with projections extending through 2026 [^][^][^][^]. The WPSR is typically issued every Wednesday, or on Thursday following a federal holiday, and offers comprehensive breakdowns of commercial stocks and SPR levels segmented by PAD District [^][^][^][^].
Commercial and strategic crude inventories recently showed decreases. For the week concluding June 19, 2026, the EIA WPSR indicated that U.S. commercial crude oil inventories totaled 412.1 million barrels, reflecting a week-over-week reduction of 6.1 million barrels [^][^][^][^][^][^]. Concurrently, the SPR was reported at 332.0 million barrels, marking an approximate 9.0 million barrel decrease from the preceding week [^][^][^][^][^][^]. Beyond these frequent weekly updates, the EIA also provides monthly petroleum supply data, which offers valuable historical context [^][^]. These EIA releases are also commonly cited in contemporaneous market commentary as a useful secondary source [^][^][^][^][^][^].
9. What specific political or military events could cause the June 2026 US-Iran deal to fail and re-trigger a blockade of the Strait of Hormuz?
| Negotiation Period | 60 days [^][^][^][^] |
|---|---|
| Economic Plan Value | $300 billion [^][^] |
| Key Military Risk | Re-triggering of Strait of Hormuz blockade [^][^][^] |
The June 2026 US-Iran deal faces failure if core conditions are unmet. The agreement could collapse if a final accord is not reached within the stipulated 60-day negotiation period, or if either party violates the established ceasefire [^][^][^][^][^][^]. Such a failure or violation carries the substantial risk of re-triggering a blockade of the Strait of Hormuz [^][^][^].
Specific political disagreements threaten the deal's permanent establishment. Unresolved issues surrounding Iran's nuclear program, the finalization of the $300 billion economic development plan, and the permanent lifting of US sanctions are critical [^][^]. Failure to finalize these key conditions within the 60-day timeframe could precipitate the collapse of the truce and a potential return to hostilities between the parties [^][^][^][^].
Military actions could swiftly re-trigger the Strait blockade. A primary military risk is the re-establishment of the Strait of Hormuz blockade if either signatory violates the ceasefire [^][^][^]. Renewed conflict may also emerge if Iran ceases its "best efforts" to keep the strait open, or if US military operations resume in the region [^][^][^].
10. What Could Change the Odds
Key Catalysts
The EIA revised its forecast for average annual U.S. retail gasoline prices in 2026 to $3.90 per gallon. This adjustment reflects supply disruptions and geopolitical tensions, specifically citing the de facto closure of the Strait of Hormuz in Q2 2026 [^]. Industry modeling as of June 2026 suggests a base-case year-end scenario of $3.40 per gallon. A high-impact tail risk scenario projects prices could reach $5.40 per gallon if geopolitical tensions, such as a conflict involving the Strait of Hormuz, trigger a collapse in diplomatic deals and significant supply shortages [^].
The broader oil market outlook for H2 2026 is characterized by a conflict between fundamentals-led bearishness, driven by increased non-OPEC supply and potential oversupply, and geopolitical upside risks related to Strait of Hormuz stability and potential military actions in the Middle East [^] [^] [^] [^] . Morgan Global Research" data-source-lanes="traditional">[^][^][^][^]. GasBuddy's initial 2026 annual outlook projected a national average of $2.97 per gallon [^][^]. However, mid-year developments introduced volatility, with AAA recording prices peaking in May 2026 at approximately $4.34 per gallon [^]. Prediction markets in late June 2026 are actively trading the probability of U.S. gasoline prices exceeding $4.60 per gallon before year-end [^].
Key Dates & Catalysts
- Strike Date: December 31, 2026
- Expiration: January 07, 2027
- Closes: December 31, 2026
11. Decision-Flipping Events
- Trigger: The EIA revised its forecast for average annual U.S.
- Trigger: Retail gasoline prices in 2026 to $3.90 per gallon.
- Trigger: This adjustment reflects supply disruptions and geopolitical tensions, specifically citing the de facto closure of the Strait of Hormuz in Q2 2026 [^] .
- Trigger: Industry modeling as of June 2026 suggests a base-case year-end scenario of $3.40 per gallon.
13. Historical Resolutions
Historical Resolutions: 2 markets in this series
Outcomes: 2 resolved YES, 0 resolved NO
Recent resolutions:
- KXAAAGASMAX-26DEC31-4.40: YES (May 04, 2026)
- KXAAAGASMAX-26DEC31-4.20: YES (Apr 30, 2026)
