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As oil prices surge amid the U.S.’s continuing war on Iran, a new government report suggests it could be several months — and perhaps even years — before the cost of consumer-grade gasoline drops below $3 per gallon again.
As of Thursday morning, the average price of regular grade gasoline is $3.884 per gallon, a 32 percent increase from where costs were just a week before the start of the joint U.S.-Israel war against Iran. As the national average approaches $4 per gallon, several states, particularly in the West, have already reached or are close to reaching that threshold.
Brent crude oil continued to rise on Thursday as well, briefly reaching $119 per barrel during the day in reaction to Iran launching attacks on oil sites in the Middle East. Prices retreated somewhat later on, but they remained much higher than where they stood just a few weeks ago.
American consumers have taken note of the economic costs of President Donald Trump’s war on Iran, with 7 in 10 saying they’ve noticed price increases. With public support for the war dismally low, White House officials have tried to quell concerns that gas prices will remain high for the foreseeable future.
“Americans will feel it for a few more weeks,” Energy Secretary Chris Wright said over the weekend, referring to gas price increases, adding that he believes there is a “very good chance” that costs will come down by this summer.
However, a new report from the Energy Information Administration (EIA), which is under the Energy Department’s purview, suggests otherwise.
According to the EIA’s projections, which were published last week, gas prices will likely stay around $3.34 per gallon for the rest of 2026. The agency is also predicting prices to average around $3.18 for 2027, meaning that gas prices won’t be below the $3 threshold, where they stood before the start of the war, until possibly 2028.
Previously, the agency had predicted an average cost of $2.91 per gallon of gas in 2026, and $2.93 per gallon for 2027.
Notably, EIA’s predictions are based on a positive outlook of some events of the war, including the Strait of Hormuz reopening sooner rather than later.
“We make the assumption in our modeling that the effective closure of the Strait of Hormuz will cause oil production in the Middle East to fall further in the coming weeks. We assume this shut-in production will gradually ease as transit through the Strait resumes,” the EIA report states.
Earlier this month, Trump tried to spin rising oil prices as something positive for Americans.
“The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,” Trump claimed in a Truth Social post.
Higher prices will likely only benefit gas and oil producers, not consumers. As gas prices go up, so, too, will prices for other consumer goods and groceries.
Trump had campaigned in 2024 on lowering gas prices to below $2 per gallon. Since taking office last year, gas prices have yet to reach that promised threshold.
On Thursday, he told reporters that he had expected consumer costs to increase because of the Iran war.
“I thought there was a chance it would be much worse,” Trump said, calling current price hikes “not bad.”
“It’s going to be over with pretty soon,” he added, despite his administration providing no timeline for the current conflict and requesting an additional $200 billion for the war.
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