Roshan Fernandez and Joe Pinsker
4 min read
Hitting the road this summer won’t bring as big of a hit to your wallet.
The national average for a gallon of regular gasoline, $3.21, is about 23 cents cheaper than this time last year, according to data from the U.S. Energy Information Administration. Analysts say plentiful supply is expected to keep prices down in the coming months even with turmoil in the Middle East.
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Oil prices on Tuesday were lower than before Israel and Iran’s conflict began.
Reduced prices would be a boon for consumers during the warmer months when Americans drive more. Low energy prices so far this year have already contributed to the economy’s resilience and helped keep inflation in check.
Oil prices tumbled Monday after Iran targeted a U.S. military base in Qatar for retaliatory strikes, with traders interpreting the move as a sign that strikes might spare energy infrastructure and oil tankers. The $5.53-a-barrel drop in Brent crude, the international benchmark, was the largest single-day dollar decline in front-month oil futures since summer 2022.
The Brent price fell Tuesday to $67.14 a barrel after the two sides continued to exchange fire despite a U.S.-brokered cease-fire. Later in the day, there were signs the cease-fire might be holding.
Patrick De Haan, head of petroleum analysis at GasBuddy, expects gasoline prices to fall in the coming days and hold between $3 and $3.20 for the summer, assuming Israel’s conflict with Iran doesn’t re-escalate. Even if the conflict were to reignite or worsen, De Haan said prices likely wouldn’t rise more than 15 cents a gallon.
“I don’t have enough in front of me to believe that there’s going to be a paradigm shift in gas prices for the rest of the summer,” De Haan said.
That is because the Organization of the Petroleum Exporting Countries has been increasing production, and U.S. output is near records.
Analysts said a robust supply of crude oil, including some domestic production coming online, is expected to outpace demand and push prices lower later this year.
“All the information points to much cheaper gasoline by the time we get into switching the clocks back,” said Tom Kloza, chief market analyst at consulting firm Turner, Mason.
Gas prices can influence attitudes about the economy, given how often drivers encounter them at the pump and on roadside signs. Just over two-thirds of consumers said they would drive five minutes out of their way to save 5 cents a gallon on gas, according to a survey from the National Association of Convenience Stores, a trade group.
