How high will US gas prices get in 2026?
Short Answer
Both the model and the market overwhelmingly agree that US gas prices will get above $4.00 in 2026, with only minor residual uncertainty.
1. Executive Verdict
- GasBuddy forecasts a summer 2026 average of $4.80 per gallon.
- Prices may exceed $5.00 if the Strait of Hormuz conflict persists.
- Forward crude curves indicate acute oil supply stress continuing through 2026.
- Strait of Hormuz closure is a primary bullish catalyst for oil prices.
- Coordinated reserve releases could temper summer 2026 price increases.
- Diplomatic de-escalation may trigger a significant oil price correction before Q4 2026.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Above $5.00 | 30.0% | 29.3% | GasBuddy forecasts prices may exceed $5.00 in 2026 if the Strait of Hormuz conflict persists. |
| Above $6.00 | 7.0% | 12.5% | GasBuddy forecasts prices may exceed $5.00 in 2026 if the Strait of Hormuz conflict persists. |
| Above $5.60 | 12.0% | 14.2% | GasBuddy forecasts prices may exceed $5.00 in 2026 if the Strait of Hormuz conflict persists. |
| Above $5.80 | 9.0% | 13.1% | GasBuddy forecasts prices may exceed $5.00 in 2026 if the Strait of Hormuz conflict persists. |
| Above $5.20 | 25.0% | 27.8% | GasBuddy forecasts prices may exceed $5.00 in 2026 if the Strait of Hormuz conflict persists. |
Current Context
US gas prices are elevated, with higher summer averages expected. As of late May 2026, the U.S. national average gasoline price stands at approximately $4.45 per gallon, largely due to global supply disruptions caused by a conflict involving the blockade of the Strait of Hormuz since February 2026 [^][^][^]. GasBuddy forecasts the summer average (Memorial Day to Labor Day 2026) to be $4.80 per gallon, with potential for prices to exceed $5.00 per gallon if the Strait of Hormuz closure persists [^][^][^].
Long-term forecasts suggest prolonged high prices due to significant supply loss. Analysts indicate that even if the Strait of Hormuz reopens, gasoline prices are unlikely to return to sub-$3.00 levels for many months, potentially not until 2028 [^][^][^][^]. This persistent pressure stems from severely depleted global oil inventories, which have lost approximately 12.8 million barrels per day (mb/d) of production since February 2026, creating significant volatility and upward price pressure on both crude oil and retail gasoline [^][^][^].
Analysts have significantly raised 2026 oil price forecasts, anticipating slower recovery. Major financial and energy institutions, including Morningstar DBRS and the EIA, have revised their 2026 price forecasts upward [^][^][^]. Some anticipate Brent crude to hover around $106/bbl through the spring, with a gradual moderation later in the year as production recovers [^][^][^].
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This market shows a distinct downward trend, with the probability of US gas prices reaching the contract's threshold declining from a high of 94.0% to its current price of 71.0%. Despite this overall bearish trajectory, the chart registered a significant price spike around May 20, 2026, when the price jumped 10 percentage points from 81.0% to 91.0%. This sharp increase in positive sentiment directly correlates with news reports from that period detailing the ongoing blockade of the Strait of Hormuz and forecasts, such as one from GasBuddy, predicting an expensive summer with average prices potentially exceeding the market's strike price. The initial market reaction was a strong belief that the supply disruption would push prices higher.
Following the May 20 spike, however, the price has reversed course and fallen substantially to the 71.0% level. This suggests that the initial conviction driven by the supply disruption news has waned. The price history indicates a key resistance level in the 91.0% to 94.0% range, which the market has been unable to sustain. The current price near 71.0% may be establishing a new support level. Total volume is moderate at 2,446 contracts, with recent trading activity accompanying the latest price drop, indicating some conviction behind the bearish move. Overall, market sentiment appears to have shifted from a near-certainty of high gas prices to a more skeptical outlook, possibly anticipating a resolution to global supply issues or other factors that could lower prices before the end of the year.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
Outcome: Above $4.80
📉 May 27, 2026: 15.0pp drop
Price decreased from 77.0% to 62.0%
What happened: The primary driver of the 15.0 percentage point drop on May 27, 2026, was likely traditional market analyses published on that day [^]. These analyses suggested emerging hopes for an end to the Middle East conflict, indicating a potential for oil prices to drive lower later in the year and gradually return to pre-war levels [^]. This shift in sentiment, published coincident with the market move, diminished expectations that US gas prices would remain above $4.80. No specific social media activity, such as posts from key figures or viral narratives, is identified in the research as a direct cause for this price movement.
📉 May 25, 2026: 15.0pp drop
Price decreased from 70.0% to 55.0%
What happened: The primary driver of the 15.0 percentage point drop in the prediction market was the significant decline in crude oil prices, which fell 11.03% over the preceding month leading up to May 27, 2026 [^]. This substantial decrease in the largest component of retail gasoline prices directly reduced expectations for U.S. gas prices to exceed $4.80 in 2026 [^][^]. While recent news indicated a potential "social media catalyst" for this crude oil price drop, specific details such as who posted or what they said are not provided [^][^]. Therefore, social media appears to be an unconfirmed contributing accelerant to the crude oil price decline rather than an identifiable primary driver of the prediction market movement itself.
📉 May 23, 2026: 19.0pp drop
Price decreased from 82.0% to 63.0%
What happened: The primary driver for the 19.0 percentage point drop in the "Above $4.80" outcome on May 23, 2026, was emerging optimism in traditional news and oil markets regarding potential US-Iran diplomatic progress [^][^][^][^]. As of late May 2026, national gas prices began to retreat from mid-May peaks, dropping to $4.45 per gallon by May 26, 2026, with sources like GasBuddy reporting that "oil markets bet on diplomacy" [^][^]. This positive outlook for de-escalation directly decreased the perceived likelihood of US gas prices exceeding $4.80 in 2026. Social media activity could not be identified as a primary driver or contributing accelerant from the provided information.
Outcome: Above $5.00
📈 May 26, 2026: 12.0pp spike
Price increased from 43.0% to 55.0%
What happened: The primary driver for the 12.0 percentage point spike in the "Above $5.00" outcome was the escalating impact of the ongoing conflict in the Middle East, particularly the threat to the Strait of Hormuz, a crucial global oil supply route [^]. By May 20, 2026, CBS News reported the national average gas price at $4.56 per gallon and cited GasBuddy's prediction that prices could "test their all-time high of $5.02 a gallon if the Strait of Hormuz... remains closed" [^]. This traditional news report, which surfaced six days before the market movement, solidified concerns about supply disruptions and the potential for prices to exceed $5.00. Social media activity was not identified as a primary driver or significant accelerant based on the provided information.
📉 May 22, 2026: 15.0pp drop
Price decreased from 56.0% to 41.0%
What happened: The primary driver for the 15.0 percentage point drop on May 22, 2026, was likely the market's re-emphasis on earlier traditional news forecasts projecting lower average gasoline prices for the year. Forecasts from late 2025 and early 2026 by J.P. Morgan, Goldman Sachs, and the EIA anticipated Brent crude prices around $50-$60 per barrel and regular gasoline averaging $2.82-$2.97 per gallon for 2026, driven by global supply outpacing demand [^][^][^][^][^]. This long-term bearish outlook on overall 2026 prices likely outweighed more immediate warnings about potential short-term price spikes from geopolitical events [^][^]. Based on the provided information, social media activity was irrelevant to this price movement.
4. Market Data
Contract Snapshot
The market resolves to "Yes" if AAA reports the maximum national average regular gas price in the US exceeds $4.80 at any time from market issuance through December 31, 2026, inclusive; otherwise, it resolves to "No." The market opened on March 23, 2026, and the outcome is verified by AAA (gasprices.aaa.com). The market closes after the outcome occurs, or by December 31, 2026, 1:25 AM EST, with payouts projected one hour later, and insider trading by employees of source agencies or those with material non-public information is prohibited.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Last trade probability |
|---|---|---|---|
| Above $4.60 | $0.72 | $0.29 | 71% |
| Above $4.80 | $0.62 | $0.45 | 62% |
| Above $5.00 | $0.36 | $0.70 | 30% |
| Above $5.20 | $0.27 | $0.81 | 25% |
| Above $5.40 | $0.22 | $0.84 | 18% |
| Above $5.60 | $0.12 | $0.89 | 12% |
| Above $7.00 | $0.10 | $0.95 | 11% |
| Above $5.80 | $0.09 | $0.92 | 9% |
| Above $6.60 | $0.09 | $0.97 | 9% |
| Above $6.00 | $0.08 | $0.93 | 7% |
| Above $6.20 | $0.07 | $0.94 | 7% |
| Above $6.40 | $0.06 | $0.95 | 6% |
| Above $6.80 | $0.07 | $0.98 | 2% |
Market Discussion
Traders widely anticipate US gas prices will exceed $4.60 and $4.80 in 2026, with some believing prices could go significantly higher, even above $5.00 or $7.00. Arguments for higher prices cite geopolitical factors, such as the lack of an Iran deal, which is seen as continually impacting energy prices. Counterarguments express skepticism about very high price targets, linking gas prices reaching $6.00 to an "unequivocally recessionary" environment, which some find inconsistent with current low recession probabilities in other markets.
5. How do the H2 2026 crude oil price forecasts from the EIA and Morningstar DBRS compare in their assumptions about the Strait of Hormuz conflict?
| EIA Brent Crude Forecast (May-June 2026) | $106/b [^] |
|---|---|
| EIA Brent Crude Forecast (4Q26) | $89/b [^] |
| Morningstar DBRS Brent Crude Forecast (Full-Year 2026) | $80/b [^] |
Both the EIA and Morningstar DBRS differ on crude oil price normalization. While both organizations identify the Strait of Hormuz conflict as a primary driver of elevated crude oil prices due to supply constraints, their forecasts diverge regarding the timeline and severity of price normalization following the conflict [^][^][^][^].
EIA projects gradual price normalization after Strait of Hormuz reopens. The U.S. Energy Information Administration's May 2026 Short-Term Energy Outlook anticipates the Strait of Hormuz remaining largely closed through late May, with shipping gradually resuming in June. A slow return to pre-conflict production levels is expected later in the year. This scenario leads the EIA to forecast Brent crude oil prices averaging $106 per barrel in May and June, subsequently decreasing to an average of $89 per barrel in the fourth quarter of 2026 [^][^].
Morningstar DBRS anticipates prolonged high prices post-conflict peak. Morningstar DBRS believes the conflict and the subsequent global crude supply shortage will reach their peak in the second quarter of 2026. They project that high prices will persist for at least a few months even after the Strait reopens, as both market confidence and energy production in the Gulf region will require time to recover. Consequently, Morningstar DBRS has adjusted its full-year 2026 forecast to $80 per barrel for Brent crude and $75 per barrel for WTI crude [^][^].
6. How might a coordinated release from the U.S. Strategic Petroleum Reserve (SPR) and IEA member reserves impact GasBuddy's and the EIA's summer 2026 price forecasts?
| Estimated price effect of SPR release | 17 to 42 cents per gallon [^][^] |
|---|---|
| GasBuddy Summer 2026 average forecast | $4.80/gal [^] |
| EIA 2026 retail gasoline forecast | $3.88/gal [^][^] |
Coordinated reserve releases could temper summer 2026 gasoline price increases. A potential coordinated release from the U.S. Strategic Petroleum Reserve (SPR) and International Energy Agency (IEA) member reserves might ease pressure on summer 2026 retail gasoline price forecasts. A U.S. Treasury analysis of a 2022 coordinated release estimated retail gasoline price reductions ranging from 17 to 42 cents per gallon [^][^]. However, such a release would likely not fully reverse a summer price peak if underlying geopolitical supply disruptions, such as the closure of the Strait of Hormuz, persist [^][^][^]. The U.S. Treasury analysis also noted that the pass-through of these reductions might be imperfect, particularly when refining markets are tight [^][^].
GasBuddy and EIA offer differing summer 2026 retail gasoline price projections. GasBuddy's May 20, 2026, summer forecast anticipates an average retail gasoline price of $4.80 per gallon from Memorial Day through Labor Day [^]. This forecast explicitly warns that prices could exceed $5 per gallon if the Strait of Hormuz remains closed for a significant portion of the summer [^]. In contrast, the EIA's May 12, 2026, Short-Term Energy Outlook (STEO)-based release forecasts 2026 retail gasoline at $3.88 per gallon [^][^]. Both forecasts identify the timing and persistence of disruptions in the Strait of Hormuz as a main driver for their respective price projections and underlying assumptions [^][^][^][^].
7. What do the forward curves for Brent and WTI crude futures indicate about market expectations for oil supply through the end of 2026?
| Market Deficit Until | Q4 2026 [^][^] |
|---|---|
| Mid-2026 Crude Futures | ~$100-$110 [^][^] |
| Dec 2026 Crude Futures/EIA Brent | Mid-$70s to low-$80s (futures) / ~$89/b (EIA Brent) [^][^][^] |
Forward curves indicate acute oil supply stress continuing through 2026. Forward curves for Brent and WTI crude futures indicate an expected acute physical supply stress and a market deficit projected to persist until the final quarter of 2026, primarily due to a Hormuz disruption [^][^][^][^]. This condition is reflected in steep backwardation, where near-term contracts are priced significantly higher than those for December 2026, signaling immediate physical supply stress [^][^].
Supply conditions are expected to normalize by late 2026. Market signals suggest this disruption premium will diminish, with supply conditions anticipated to normalize by Q4 2026 [^][^][^]. For instance, mid-2026 crude contracts are priced around $100-$110, while December 2026 contracts fall to the mid-$70s to low-$80s [^][^]. The EIA's Short-Term Energy Outlook supports this trend, projecting Brent prices around $106/b in May-June 2026 before declining to an average of about $89/b in 4Q26, indicating an easing supply/demand balance [^]. Furthermore, global oil supply is projected to decline by about 3.9 mb/d on average in 2026 if Hormuz flows gradually resume from June, with a modest surplus expected to start rebuilding depleted stocks in Q4 2026 [^][^]. Gasoline price expectations also reflect temporary front-end tightness, with potential prices reaching $5+ if the Hormuz disruption persists through much of summer 2026 [^][^].
8. Are high-frequency satellite and maritime tracking data available to monitor oil tanker movements through the Strait of Hormuz in real-time during 2026?
| Strait of Hormuz Status | Effectively closed to most commercial shipping (as of May 2026) [^][^][^] |
|---|---|
| Transit Volume | Collapsed to approximately 2% of pre-crisis levels [^][^][^] |
| Conflict Intensification | Late February 2026 [^][^][^] |
Advanced tracking systems monitor Strait of Hormuz oil tanker movements. High-frequency satellite and maritime tracking data, including Synthetic Aperture Radar (SAR) and automated identification system (AIS) monitoring, are available and actively utilized by specialized platforms to monitor oil tanker movements through the Strait of Hormuz in real-time during 2026 [^][^][^][^]. These platforms specifically track overall shipping activity and monitor the regional oil crisis.
Strait of Hormuz closure makes monitoring critical for safety. Intensive monitoring is crucial because the Strait of Hormuz has been effectively closed to most commercial shipping as of May 2026 [^][^][^]. This closure resulted from a regional conflict that significantly intensified in late February 2026. Consequently, transit volumes through the Strait have collapsed to approximately 2% of pre-crisis levels, making the tracking of reduced volumes and identification of stranded vessels critical [^][^][^].
9. What diplomatic or military developments regarding the Strait of Hormuz could trigger a significant oil price correction before Q4 2026?
| Brent Crude Price Projection (Quick Peace Scenario) | US$80 per barrel by end of 2026 if Strait reopens by June [^] |
|---|---|
| Full Commercial Shipping Flow Return | Not before 2027 [^][^] |
| Trigger for Oil Price Correction | Diplomatic breakthrough or rapid de-escalation concerning Strait of Hormuz before Q4 2026 [^][^][^][^] |
Diplomatic breakthroughs or de-escalation could significantly correct oil prices. A significant oil price correction could occur before Q4 2026 with a diplomatic breakthrough or rapid de-escalation of military activity regarding the Strait of Hormuz [^][^][^][^]. Oil markets are highly sensitive to regional developments, typically seeing prices fall with hopes of diplomatic progress and rise with renewed military tensions or setbacks [^][^][^][^]. A sustained ceasefire, withdrawal of forces, and a clear cooperative mechanism for managing ship traffic would quickly reduce the geopolitical risk premium currently impacting oil prices [^][^][^][^].
A "Quick Peace" scenario eases oil prices and enables Iranian exports. Under Wood Mackenzie's "Quick Peace" scenario, Brent crude prices are projected to ease to approximately US$80 per barrel by the end of 2026, assuming the Strait of Hormuz reopens by June [^]. Such an agreement could also facilitate the lifting of US naval blockades and sanctions, allowing Iran to resume significant oil exports and normalize global supply [^][^][^][^]. However, even with a political agreement, practical aspects such as demining and naval clearance operations suggest that full commercial shipping flows may not return to pre-conflict levels before 2027 [^][^].
10. What Could Change the Odds
Key Catalysts
Geopolitical volatility, specifically the ongoing war with Iran and the closure of the Strait of Hormuz, is the primary bullish catalyst for oil and gas prices in 2026 [^] [^] [^] . gas prices in years expected to continue rising this summer - CBS News">[^]. As of late May 2026, the national average gasoline price is approximately $4.56 per gallon, representing a sharp increase from pre-conflict levels following the outbreak of the war with Iran in late February 2026 [^][^][^]. GasBuddy forecasts a national average gasoline price of $4.80 per gallon from Memorial Day through Labor Day 2026, with the potential to exceed $5.00 per gallon and set new all-time records if the Strait of Hormuz remains closed [^][^][^].
Diplomatic negotiations serve as a key bearish catalyst that could lower prices [^] [^] [^] . gas prices in years expected to continue rising this summer - CBS News">[^]. However, analysts note that even after a potential resolution to the Strait of Hormuz closure, retail gasoline prices are unlikely to drop below $3.00 per gallon for several months, potentially taking up to a year to fully recover to previous levels [^][^][^]. The EIA forecasts a gradual decline in crude oil prices through the second half of 2026, with Brent crude projected to fall from an average of $106/b in Q2 to $89/b in Q4 2026 as production in the Middle East and elsewhere gradually normalizes [^][^].
Key Dates & Catalysts
- Strike Date: December 31, 2026
- Expiration: January 07, 2027
- Closes: December 31, 2026
11. Decision-Flipping Events
- Trigger: Geopolitical volatility, specifically the ongoing war with Iran and the closure of the Strait of Hormuz, is the primary bullish catalyst for oil and gas prices in 2026 [^] [^] [^] .
- Trigger: As of late May 2026, the national average gasoline price is approximately $4.56 per gallon, representing a sharp increase from pre-conflict levels following the outbreak of the war with Iran in late February 2026 [^] [^] [^] .
- Trigger: GasBuddy forecasts a national average gasoline price of $4.80 per gallon from Memorial Day through Labor Day 2026, with the potential to exceed $5.00 per gallon and set new all-time records if the Strait of Hormuz remains closed [^] [^] [^] .
- Trigger: Diplomatic negotiations serve as a key bearish catalyst that could lower prices [^] [^] [^] .
13. Historical Resolutions
Historical Resolutions: 3 markets in this series
Outcomes: 3 resolved YES, 0 resolved NO
Recent resolutions:
- KXAAAGASMAX-26DEC31-4.40: YES (May 04, 2026)
- KXAAAGASMAX-26DEC31-4.20: YES (Apr 30, 2026)
- KXAAAGASMAX-26DEC31-4.00: YES (Mar 31, 2026)
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