Kevin Hassett has suggested that U.S. gasoline prices could potentially fall to $3 per gallon, despite current prices being influenced by geopolitical tensions involving Iran. As of July 13, 2026, the national average for gasoline stands at $3.87 per gallon, while the Energy Information Administration (EIA) reports an average of $4.05 per gallon. The ongoing conflict and subsequent closure of the Strait of Hormuz by Iran have significantly impacted global oil supply, pushing Brent crude prices above $100 to $120 per barrel. These developments have introduced a risk premium, complicating predictions about future gasoline prices.

Key Takeaways

• Hassett’s statement suggests a potential decrease in gasoline prices, impacting market expectations for crude oil highs.
• Current market conditions, affected by Middle Eastern tensions, have elevated crude oil prices, complicating forecasts.
• Markets appear to see the potential for a decrease in crude prices as consistent with Hassett’s outlook, affecting the probability of new highs.

What to Watch

The market’s reaction to geopolitical developments in the Middle East will be crucial. Movements in crude oil pricing, influenced by Iranian actions and global diplomatic efforts, will be key indicators. Additionally, any shifts in OPEC’s production strategies or geopolitical stability may impact the likelihood of oil reaching new all-time highs by the end of 2026. Markets will closely monitor these factors for indications consistent with a decrease in crude oil prices.

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