President Trump stated that the Justice Department will investigate the reasons behind high gasoline prices. This announcement comes as energy experts and commentators predict that elevated pump prices are likely to persist throughout 2026, despite recent peace talks and efforts to reopen the Strait of Hormuz. Rebecca Babin, senior energy trader at CIBC Private Wealth, projects average gasoline prices will remain above $3 per gallon for the remainder of the year, a sentiment echoed by GasBuddy's Patrick De Haan, who forecasts prices between $3.35 and $3.95 during the summer months.
The current increase in gas prices follows the outbreak of the Iran conflict in late February, which caused disruptions in the Strait of Hormuz, a critical shipping lane for about 20% of global oil and LNG shipments. Before the conflict, gas prices were below $3 per gallon, but they surged to over $4 per gallon according to the American Automobile Association, and even peaked at $4.56 in mid-May. While a fragile ceasefire is now in place and oil prices have seen some retreat, with crude futures slipping below $80 a barrel, experts caution that a return to pre-war levels is unlikely.
The administration of President Trump has faced growing frustration over these high prices, as they present a political challenge ahead of the November midterm elections. Energy Secretary Chris Wright had previously suggested that prices below $3 per gallon might not return until next year, a view quickly contradicted by President Trump. The administration is also exploring regulatory changes, with expectations to lift summer gasoline regulations to potentially curb energy prices soon, according to sources.
Despite the recent agreement between the U.S. and Iran to end hostilities and reopen the Strait of Hormuz, uncertainty remains regarding the deal's specifics and its long-term impact on oil flow. Dan Pickering, chief investment officer at Pickering Energy Partners, indicated that while a new normal will be established, gas prices are not expected to return to $2.85. Futures markets also suggest that crude oil prices are not anticipated to fall below $70 per barrel until 2031, highlighting the expectation of sustained higher energy costs.
Energy observers point to several factors contributing to these persistently high prices, including potential damage to oil infrastructure in the Middle East and a likely increase in strategic oil stockpiling by various countries. These factors indicate that the floor for gas prices will naturally reside higher for the foreseeable future, creating ongoing economic pressure for consumers and political challenges for the current administration.
