Analyst: US could see $5 gas by Memorial Day, $6 per gallon on the table

Gas could hit $5 per gallon by Memorial Day, $6 by later in the summer: 'Nothing's impossible at this point'

Jake Lahut

As price surges from states across the midwest began pouring in, Gas Buddy's Patrick De Haan couldn't believe what he was seeing. The jumps, nearly $1 per gallon overnight, were leading his automated systems to conclude it was a "fat fingered" or some other type of input error.

"We've seen a fast and furious surge in wholesale gasoline, diesel and jet fuel prices," De Haan, the site's head of petroleum analysis, tells Sherwood News on Wednesday evening. De Haan sounded the alarm earlier in the day about a rapid spike in prices stemming from the states of Michigan, Wisconsin, Illinois, Indiana and Ohio. De Haan attributed today's price increases to a refinery in northwest Indiana going offline, but said the warning signs were apparent going back to Sunday night.

If the Strait of Hormuz off the coast of Iran is not reopened, De Haan said the price of gas could surge past his earlier estimate of $4.50 in the next two weeks to over $5 per gallon, or more, by Memorial Day.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

"Yeah, I mean, nothing's impossible at this point. Absolutely," De Haan says when asked if the price of gas could reach $5.50 or even $6 per gallon by later in the summer. "It's definitely possible that we could see new all- time records set for gasoline prices, whether or not in the weeks ahead or beyond that."

The destruction of infrastructure in the refining of crude oil has played a role during the war so far, De Haan noted, but he emphasized that much of the upward price pressure heading into the crucial sumer travel window hinges upon the Strait of Hormuz.

"At this point, it looks like the blockade is going to be extended, that there's no real plan in place," he says. "And the worry is that as we get closer to Memorial Day, if the strait is still closed, I think we a have very good shot of hitting new all-time records for both gasoline and diesel."

With most gas station retailers restocking every two days or so, De Haan noted that these hikes will be sticky as these buyers try to take back some of their margins once wholesale prices begin to fall. "What a lot of motorists don't realize is that stations are a couple days behind on raising prices, and that's why prices take more time to go down because stations need to reabsorb the margin that they hemorrhage when prices were actively spiking."

For someone who's seen almost everything in the fuel market, even De Haan was taken aback by how the current market dynamics have been giving his systems everything they can handle — until they can't.

"We build validation tools that are built for normal times," De Haan says. "And whenever you put in a price that's a dollar a gallon higher than it was 24 hours ago, our systems have a hard time keeping up on what's real, and what might be a fat fingered or inaccurate price post. It's extraordinarily rare that you see prices going up a dollar a gallon in a retail market compared to where they were just six hours ago."

Earlier in the day, De Haan recalled misspeaking about the national average for gasoline being $3.30 a gallon instead of $4.30, an example of "how volatile the market is and how much prices have surged when you're conflating and mixing up data." So, in turn, he gives the algorithms some grace for not being able to keep up, either.

And if someone like him is having a hard time keeping up, it can't be any easier for gas station owners hoping to make sense of the market.

"It's just a lot of uncertainty," De Haan says. "I mean, station owners and those that market fuel are finding it really difficult to stay ahead of the game and stay ahead of the volatility. I mean, it's virtually impossible."

Tom Jones11h

The UAE’s OPEC exit will hit the group in the barrels

After just shy of 60 years in OPEC, its membership even predating its status as a nation-state, the United Arab Emirates yesterday announced its shocking departure from the oil production group, effective May 1, as the knock-on effects of the Iran war continue to play out across the Middle East and the energy landscape.

For context, the UAE produces the third-highest amount of oil in the group, per April data and OPEC’s latest set of annual statistics.

According to the cartel’s 2025 Annual Statistical Bulletin, the OPEC group was collectively exporting some 19 million barrels of crude oil a day last year, with the United Arab Emirates accounting for some 14% of that daily output.

UAExit means UAExit

The nation, whose energy minister told Reuters yesterday that the decision was taken “after a careful look at current and future policies related to level of production” and wasn’t made following discussions with any other country, made up a healthy share of the group’s total confirmed crude oil reserves, as well.

Of the 12 nations in the core group, which was founded by just five oil superpowers back in September 1960, only two (Iraq and Saudi Arabia) exported more barrels of crude oil daily, pumping out 3.36 million and 6.05 million barrels, respectively, each day to nations around the world.

For its part, the UAE said it will “continue its responsible role by gradually and thoughtfully increasing production, in line with demand and market conditions,” per the official state news agency. Clearly, the nation now wants a little more control of just how much oil it can pump around the world, with the UAE having to eat a large proportion of lost revenues due to its healthy abundance and OPEC restrictions.