U.S. Gas Prices Expected to Rise Further in 2026 Amid Oil Market Tensions
Quick Look
U.S. oil prices above $100 per barrel have driven gasoline prices to multi-month highs, with prediction market traders on Kalshi forecasting a 71% chance the national average surpasses $4.60 per gallon in 2026, 57% odds it exceeds $4.80, and over 40% chance it crosses $5.00, amid escalating U.S.-Iran tensions threatening the Strait of Hormuz.
AI-generated summary
Why It Matters
U.S. gas prices last reached a record high of just over $5 per gallon in June 2022, and current prices are approaching multi-month highs as oil trades above $100 per barrel.
U.S. oil prices are again above $100 per barrel, sending gasoline prices to multi-month highs. But traders on prediction market platforms expect the amount Americans are spending at the pump will hit fresh highs this year.
Gas prices peaked at $4.56 per gallon on May 21, according to AAA's national average. Now, traders on Kalshi think there's a 71% chance that the average will surpass $4.60 in 2026.
Speculators on Kalshi also place 57% odds that prices will top $4.80 a gallon, and just over a 40% chance that they cross $5.00. U.S. gas prices last hit a record high of just over $5 per gallon in June 2022.
On Kalshi, contracts in the market ask traders if gas prices will cross various price points. Contracts are resolved using AAA's data.
Tensions between the U.S. and Iran have escalated in recent weeks, putting in doubt the status of the Strait of Hormuz, a critical passageway for the global supply of oil, and pushing the commodity's price higher. On Monday, West Texas Intermediate crude futures were higher by 3.5% to more than $103 per barrel.
Traders on Kalshi also think that higher oil prices will last for longer. They place 50-50 odds that gas prices will be above $4.25 per gallon on election day, Nov. 3.
Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.
What to Watch
AI outlook — possibilities, not facts
U.S. national average gas price will surpass $4.60 per gallon in 2026
Likely · Within months
U.S. national average gas price will exceed $4.80 per gallon in 2026
Likely · Within months
U.S. national average gas price will cross $5.00 per gallon in 2026
Possible · Within months
Open Questions
- Will the U.S. take military or diplomatic action regarding Iran's influence on the Strait of Hormuz?
- How might OPEC+ respond to sustained high oil prices?
- What impact will prolonged high gas prices have on consumer spending and inflation?
