The Key Variable: The Strait of Hormuz
Gas prices will not meaningfully drop until oil supply normalizes, and that hinges almost entirely on the Strait of Hormuz. About 20% of the world’s oil passes through this narrow waterway, which Iran has effectively blockaded since February 28.
Three Scenarios
Best Case: Prices ease by mid-April
If the US Navy begins escorting commercial ships through the strait by late March (as Energy Secretary Chris Wright suggested is possible) and/or a ceasefire is reached, oil prices could start falling within days. Gas prices typically lag oil by 1-2 weeks, so you could see relief at the pump by mid-April.
Middle Case: Elevated through summer
If the conflict drags on but partial shipping resumes through military convoys, oil prices may settle in the $90-110 range. Gas would stabilize around $3.50-4.00 nationally — higher than pre-war but not at crisis levels.
Worst Case: $5+ gas through 2026
If the strait remains fully blocked and the conflict escalates, oil could push toward $150-200/barrel. In this scenario, national gas averages could hit $5+/gallon, with California and other high-cost states seeing $6-7.
What Is Helping
- IEA strategic reserve release: The largest coordinated release in history is adding supply
- US domestic production: Already at record levels, with more wells coming online
- Naval escort plans: G7 nations are coordinating convoy operations
- Diplomacy: Both sides have expressed interest in ending the conflict, though conditions remain far apart
What You Can Do Now
- Do not panic-buy or hoard fuel — that makes shortages worse
- Combine trips and carpool when possible
- Consider public transit if available in your area
- If you are due for a car purchase, factor in fuel efficiency heavily
- Lock in heating oil contracts if your provider offers fixed-rate plans