BY COMFORT OGBONNA
Millions of Americans heading out for the Memorial Day holiday weekend are expected to face significantly higher fuel costs, as ongoing global supply disruptions tied to the conflict with Iran continue to push gasoline prices upward and reshape the outlook for the U.S. summer travel season.
Retail gasoline prices in the United States have surged by more than $1.50 per gallon, or roughly 45%, since late February, when military escalation between the United States, Israel and Iran intensified. The spike has been driven by rising crude oil costs and fears over sustained disruptions to global energy flows through critical shipping routes.
A key pressure point has been the Strait of Hormuz, through which about 20% of global oil consumption is transported. Restrictions and instability in the waterway have contributed to tighter global supply conditions, increasing volatility in energy markets and pushing up costs for both crude oil and refined fuels.
The price increases are adding political pressure on President Donald Trump, as households across the country contend with rising energy bills. Several U.S. states have already moved to temporarily suspend gasoline taxes in an effort to reduce costs, while discussions at the federal level about reducing the 18.4-cent-per-gallon gasoline tax are also gaining attention.
Despite higher prices, travel demand remains strong for the holiday period. Data from the American Automobile Association indicates that about 39.1 million people are expected to travel by car over the weekend, while another 3.66 million will fly to their destinations.
However, analysts say the broader trend points toward more cautious consumer behavior as fuel costs remain elevated. Patrick De Haan, head of petroleum analysis at GasBuddy, described the current period as one of the most volatile in recent years for fuel markets, warning that disruptions tied to the Strait of Hormuz could keep prices elevated well into the summer.
He noted that American consumers could collectively spend billions more on fuel this travel season, with recovery potentially taking a year or longer even if geopolitical conditions stabilize.
Surveys also show shifting travel behavior among U.S. households. Only 56% of Americans now plan to drive trips longer than two hours this summer, down from 69% a year earlier. Cost has become the dominant factor in travel decisions, with 67% of respondents saying fuel prices are influencing their driving plans and 36% reporting they intend to take fewer road trips.
While gasoline consumption has remained relatively strong so far, analysts warn that supply conditions are tightening quickly. U.S. gasoline inventories have declined for 14 consecutive weeks, raising concerns that stockpiles could soon approach their lowest seasonal levels in more than a decade.
Recent data from the U.S. Energy Information Administration showed gasoline inventories fell by 1.5 million barrels last week to 214.2 million barrels, slightly below expectations but still reflecting a persistent drawdown trend.
Energy market analysts say the combination of geopolitical uncertainty, refinery outages, and seasonal demand increases could further strain supply in the coming months. The upcoming Atlantic hurricane season also adds another layer of risk, potentially disrupting refining and distribution infrastructure along the U.S. Gulf Coast.
Industry forecasts suggest that the national average gasoline price for Memorial Day could be about $1.48 higher than last year. Some analysts warn that if restrictions on shipping through the Strait of Hormuz persist through the summer, prices could potentially exceed $5 per gallon in certain regions.
John Kilduff of Again Capital said global inventories are being depleted at a rapid pace, while demand remains strong not only for crude oil but also for refined products. He warned that these conditions could continue to place upward pressure on fuel prices throughout the travel season, especially if supply disruptions in the Middle East continue.