Americans are about to pay more for Memorial Day road trips than they have in four years.
The Iran war is the reason. Until the Strait of Hormuz reopens, gas prices are not coming down.
The U.S. average gas price hit $4.55 a gallon on Friday, per AAA. That is more than a 50% jump since the war started on February 28.
The blockade of the Strait of Hormuz has pushed U.S. crude oil up more than 40% from prewar levels. The strait is the most important oil export route in the world.
That closure is the largest oil supply hit in history. It is bigger than the shocks traders priced in during the first weeks of the war.
GasBuddy's Patrick De Haan said gas could hit $5 a gallon by June if the strait stays closed. He said pump prices probably will not return to normal until well into 2027, even if the strait reopens tomorrow.
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Global oil supplies are draining fast. David Goldwyn, the State Department's former international energy coordinator, warned that gas, diesel and jet fuel prices could jump in another four to six weeks once the buffers run out.
The U.S. makes enough fuel at home to avoid real shortages. But Asia and Europe are bidding for U.S. crude and refined exports.
That demand pushes U.S. prices up even when domestic supply looks fine. The same barrels can be sold for more overseas.
Goldwyn said diesel could hit $7 a gallon. That is the bill trucking firms pay to move groceries, fuel and just about everything else on the road.
That has already shown up in the early weeks of the war, when diesel rose faster than gas.
Jet fuel costs are also squeezing airlines, just as the summer travel season starts.
Friday's pump price was the highest Memorial Day reading since 2022. That was the year prices spiked after Russia's full-scale invasion of Ukraine.
Oil prices fell nearly 7% before the holiday. That was after President Trump said he called off strikes on Iran to give talks more time.
He has also promised the war will end quickly, only for tensions to flare again. Trump told reporters Tuesday he is not thinking about Americans' money "even a little bit" as he tries to land a deal.
The market needs to see real, clear steps to reopen the strait before $5 gas is off the table.
Memorial Day is the unofficial kickoff for the summer driving season, when gas demand usually peaks.
Until Hormuz reopens, $5 gas stays on the menu.
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