U.S. gasoline prices are projected to fall below $4 per gallon within the next 10 days, marking the first time since July, according to energy analysts. The national average gas price stood at $4.06 per gallon on Thursday, with experts at GasBuddy and Gulf Oil predicting a decline to $3.65 per gallon in the coming weeks.
Brent crude oil futures, the international benchmark, rose 2.4% on Thursday to $96.88 per barrel after a sharp 8.7% drop the previous day. West Texas Intermediate, the U.S. benchmark, traded at $90.42 per barrel on Thursday, down from recent highs above $100. Analysts attribute the volatility to uncertainty over the Iran conflict, with some citing easing supply constraints in the Strait of Hormuz as a contributing factor.
Election-driven market shifts
Energy experts link the recent price declines to midterm election results, which increased expectations of a quicker resolution to the Iran war. Patrick De Haan, a petroleum analyst at GasBuddy, noted that oil prices had been falling ahead of the vote due to optimism that the election would pressure the Trump administration to seek a diplomatic end to the conflict. Tom Kloza, chief energy adviser for Gulf Oil, similarly predicted prices would drop below $4 within 10 days, citing seasonal demand shifts and lower production costs for winter-blend fuel.
War risks and strategic reserves
Despite the recent price softening, analysts warn of continued volatility due to unresolved geopolitical tensions. Giovanni Staunovo, a commodity analyst at UBS, pointed to the unresolved situation in the Middle East as a key driver of oil market instability. June Goh, senior oil analyst at Sparta Commodities, emphasized that global strategic reserves are thin, increasing the risk of supply disruptions. The U.S. military conducted strikes on an Iranian anti-aircraft facility on November 2, days before the elections, further complicating the outlook.
Political responses and policy implications
Republican leaders, including Vice President JD Vance and former President Donald Trump, have blamed the U.S. conflict with Iran for Republican losses in the midterms, arguing that rising gasoline prices contributed to voter dissatisfaction. House Minority Leader Hakeem Jeffries (D-N.Y.) called for legislative action in a November 4 letter, urging House Democrats to prioritize ending the war in their first 100 days in the majority.
Analysts at ING Bank noted that the new Congress, set to convene in January, could scrutinize war funding more closely, though they cautioned that escalation remains possible before then. Warren Patterson and Ewa Manthey of ING Bank stated that absent further conflict, the oil market may continue to shed the risk premium built up in recent months, suggesting the recent selloff was overdone.
Seasonal and structural factors
Beyond geopolitical and political drivers, analysts highlight seasonal trends as a key factor in the price decline. De Haan noted that gasoline prices typically dip in the fall as summer travel wanes and refineries switch to cheaper winter-blend fuel. Kloza also pointed to unusually high profit margins for gas stations—currently around 75 cents per gallon—as a temporary contributor to elevated prices, with a more typical markup closer to 40 cents per gallon.