JP Morgan Warns Gas Prices Could Top $5 This Month
AP Photo/John Raoux
Americans could soon be facing $5-a-gallon gasoline again—and not because of summer travel. Energy analysts at JP Morgan say prices at the pump, already up $1.16 since the Iran war began on Feb. 28, could reach that level as early as later this month if the Strait of Hormuz remains effectively closed through mid-April, according to CBS News. The current national average is $4.14 per gallon, up from $2.98 before the conflict, according to AAA. GasBuddy analyst Patrick De Haan also warned that new record prices for both gasoline and diesel are possible, particularly if tensions between the United States and Iran escalate further. The previous record average price for gasoline was $5.02 per gallon, reached in June 2022.
The financial impact on Americans could be significant. JP Morgan analysts estimate that every 10-cent increase in gasoline prices adds more than $12 billion to Americans’ annual fuel costs. If prices remain elevated, this year’s increase could reduce consumer purchasing power by roughly $100 billion—potentially wiping out much or all of the larger tax refunds many expected under the “One Big Beautiful Bill” passed by Republicans last year.
The U.S. Energy Information Administration (EIA), the statistical agency within the Department of Energy, warned Tuesday that fuel prices could stay elevated for months even if the Strait of Hormuz reopens, according to Reuters.
“Just as we had never before seen the strait close, we’ve never seen it reopen. What exactly that looks like remains to be seen,” the EIA said. The agency predicted that gasoline prices could peak around $4.30 per gallon this month but remain above $3.70 for the rest of the year.
The surge in prices is tied to a sharp drop in oil shipments through the strategically important waterway. Ship crossings through the Strait of Hormuz fell from about 130 per day in February to just six in March, according to a United Nations panel. President Trump has been pressuring Iran to reopen the route, issuing increasingly severe warnings. On Tuesday, he said that “a whole civilization will die tonight” if the strait remains closed past an 8 p.m. Tuesday deadline.
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