US gas prices unlikely to drop below $4 before midterms, experts say
High gas prices continue to weigh on wallets in the United States, as voters list affordability as a top concern ahead of early November's midterm elections. Against that backdrop, some analysts say fuel prices are unlikely to ease significantly before Election Day.
The national average price of a gallon of gas stands at $4.27, marking an increase of nearly $1.30, or 43%, since the outbreak of the Iran war in February, AAA data showed.
Analysts predicted gas prices would all but certainly remain above $4 a gallon. GasBuddy petroleum analyst Patrick De Haan ruled out a fall below the $4 threshold by early November, posting on X: 'Gasoline will not fall below $4/gal prior to the midterms.'
Analysts attributed elevated gas prices to ongoing fighting in the Middle East, which has damaged oil infrastructure and forced firms to take up costly means of transporting crude. The Russia-Ukraine war has also crimped fuel exports from Russia, they said, compounding the supply shortage.
There is little indication of an imminent resolution of either conflict, the analysts said. Even in the event of a peace deal in the Middle East and a drop in oil costs, gas prices would likely fall at a delayed pace as retailers sell through refined product purchased while oil prices were at higher levels.
Experts also say gas prices usually fall at a slower pace than they rise. Tom Seng, a professor of energy finance at Texas Christian University, said it is weeks before the election and there is a ramp-up of what is happening in the Middle East, as opposed to any calming or sign that energy prices are coming down.
The Brent crude futures price, a benchmark for global oil trading, climbed above $112 a barrel on Thursday. Until this week, oil prices had last reached that benchmark in May. The latest reading amounts to a rise of nearly 60% since the start of the Iran war.
Oil prices climbed earlier this week after Iran and its Houthi allies claimed attacks on energy infrastructure in the Middle East. The Islamic Revolutionary Guard Corps Navy claimed on Thursday to have attacked four vessels in the Strait of Hormuz.
The IRGC Navy also reported that three vessels hit naval mines in the Strait of Hormuz on Wednesday night. The reports came days after Yemen-based Houthi militants claimed a wave of strikes on Saudi Arabia, including the Shaybah oil field and Saudi Aramco facilities in Yanbu.
Despite continued fighting, crude oil exports from the region had improved in recent weeks, according to tracking firm Kpler. Even so, heightened transport costs and damaged refinery infrastructure have disrupted the supply of refined product necessary for auto gasoline, Denton Cinquegrana, chief oil analyst at Dow Jones Energy, said.
The United States — the world's largest oil producer — imports a small amount of fuel from the Middle East. Since oil and gas are sold on a global market, however, the unrest has sent prices rising for everyone, including US drivers.
As Election Day on November 3 approaches, analysts expect gas prices to remain at the centre of voters' affordability concerns. If prices stay above $4, there is for now little sign of that pressure easing.
