U.S. Gas Prices Stay High Despite Middle East Oil Recovery

U.S. gasoline prices remain 46% higher than pre-war levels, averaging $4.36 per gallon. While Gulf oil supply—excluding Iran—has returned to pre-war levels and tanker traffic in the Strait of Hormuz has improved, fuel prices remain stubborn due to market uncertainty and elevated transportation costs.

Shipping firms are incurring significant expenses to evade attacks, utilizing costly ship-to-ship transfers and paying tanker captains salaries as high as $100,000 monthly. Market volatility persists due to the ongoing war with Iran and recent Houthi militant attacks on Saudi Arabia's East-West pipeline. That pipeline was only recently restored to a capacity of 5.8 million barrels per day.

Analysts indicate that gasoline prices typically decline more slowly than crude prices because retailers must first sell through expensive existing inventory. This pricing lag occurs as the United States approaches midterm elections.