America is facing an oil shock that should have caused higher gas prices.
The Strait of Hormuz, which handled almost 20 million barrels of oil daily in 2025, has been closed or restricted for much of the Iran conflict. Yet the latest official U.S. average for regular gasoline was $3.855 per gallon on July 13. This is slightly below the $3.95 Americans paid on average in 2022, when Russia’s invasion of Ukraine caused chaos in energy markets.
Gas is not cheap. The key point is that the Trump administration has prevented a major supply disruption from repeating June 2022, when regular gasoline reached $5.01 across the country.
A Government Willing to Use Every Lever
The administration viewed oil supply as an emergency and implemented various policies.
In March, President Donald Trump approved a 172-million-barrel exchange from the Strategic Petroleum Reserve as part of a coordinated 400-million-barrel release by International Energy Agency members. Companies borrowing this crude must return it with premiums. This approach allows emergency supply to reach markets without permanently removing all barrels from the reserve.
The Environmental Protection Agency approved nationwide summer sales of E15 and relaxed rules that divided the country into specialized gasoline markets. The White House also temporarily waived the Jones Act, allowing foreign-flagged ships to transport oil and fuel between American ports when shipping capacity was limited.
These actions cannot replace Hormuz but can buy time and reduce regional shortages.
Trump also approached sanctions policy thoughtfully. The administration temporarily allowed the sale of Iranian oil already at sea. Treasury Secretary Scott Bessent described this as using “the Iranian barrels against Tehran” to keep prices low. Officials estimated that this waiver could release around 140 million barrels into global markets.
Domestic Production Provided a Cushion
Trump took office with a U.S. oil industry producing near record levels, and his administration continued to prioritize production. The Energy Information Administration expects American crude production to average 13.8 million barrels per day in 2026 and reach 14 million in 2027.
Domestic production does not insulate Americans from global prices, but it gives refiners more options and strengthens the country’s position during disruptions.
Alternative export routes have played a role as well. The International Energy Agency estimates that Saudi Arabia and the United Arab Emirates can reroute 3.5 million to 5.5 million barrels per day through pipelines that avoid Hormuz. While this cannot fully replace normal strait traffic, it has prevented a complete cutoff.
Demand has also weakened. The IEA projected world oil demand would decrease in 2026 as expensive fuel, slower growth, and disruptions in aviation reduced consumption. This is not a direct achievement of the White House, but it made the administration’s actions more effective.
Diplomacy Moved Prices Faster Than Drilling
The biggest drop in prices came from diplomacy, not new oil wells.
After the United States and Iran reached an interim agreement in June, tanker traffic increased and crude prices fell from their wartime highs. Kpler analyst Muyu Xu noted that reopening Hormuz could release about 93 million barrels of stranded non-Iranian crude.
Gasoline prices followed suit, dropping from about $4.50 in May to below $4 in June. Patrick De Haan, GasBuddy’s head of petroleum analysis, referred to normal oil flows as “the clearest signal that this relief is durable.”
However, the relief did not last. Renewed fighting in July again reduced tanker traffic, and analysts predicted gasoline prices could rise back to $4. The latest $3.855 figure is thus an achievement under pressure, not a lasting victory.
Where Gas Prices Could Go Next
If Hormuz fully reopens and stays open, regular gasoline prices could settle between $3.35 and $3.60 per gallon by late 2026.
The EIA’s July forecast estimated the average for the third quarter at $3.80 and projected about $3.40 in the fourth quarter as crude supply stabilizes, inventories rebuild, and summer demand decreases. It expects global production and trade to return to prewar conditions by year’s end, though full restoration may extend into early 2027.
Prices will not drop dramatically overnight. Refinery margins remain high, gasoline stocks are tight, and a new attack could quickly restore the geopolitical premium.
Still, the difference from 2022 is significant. Trump’s administration used reserves, regulatory waivers, shipping flexibility, sanctions relief, and diplomacy to prevent a partially closed Hormuz from causing $5 gasoline again.
This record deserves recognition. Holding it will require reopening the strait, not just managing its closure.