Analysts Predict $200 Oil as Gas Prices Near $6 a Gallon
A prediction market platform called Polymarket has reported that U.S. officials and Wall Street analysts are starting to prepare for the possibility of oil prices exceeding $200 per barrel as tensions with Iran continue to rise. This development comes amid a backdrop of fluctuating fuel prices across the United States, where the average cost remains just under $4 per gallon. However, in certain cities like San Francisco, gas prices have approached $6 per gallon, according to data from the crowdsourced gas app GasBuddy.
The White House was contacted via email on Sunday afternoon for comment on this situation, but no response was immediately available.
Why It Matters
President Donald Trump returned to the White House with a promise to reduce the cost of living for Americans, including lower gas prices. He criticized his predecessor, Joe Biden, for higher inflation during his tenure. Just four days before the U.S. and Israel launched joint strikes against Iran on February 28, the White House highlighted recent declines in gas prices, attributing them to “American energy dominance.”
Despite being the world’s largest oil producer, the U.S. has not been immune to the global rise in oil prices caused by the ongoing conflict in the Middle East and restrictions on travel through the Strait of Hormuz, which is a critical route for one-fifth of the world’s oil. While gas prices remain below the pandemic peak of over $5 per gallon reached in June 2022 under Biden, Trump and the Republican Party face the risk of backlash from voters during the midterms due to the increase at the pump.
What To Know
Oil prices have frequently surpassed $100 per barrel since the start of the Iran conflict. On Friday, March 27, oil traded around $101 per barrel after hovering between $90 and $95 for most of the previous week.
Australian investment firm Macquarie Group recently warned that prices could reach this level if the war continues until June. Analysts previously estimated a 40% chance of this happening, but Macquarie now believes it is 60% likely.
Macquarie’s analysts stated in a report: “If the strait were to stay closed for an extended period, prices would need to move high enough to destroy an historically large amount of global oil demand.” They added, “The timing of the re-opening of the straits, and physical damage to energy infrastructure, is the main determinant of the longer-term impact on commodities.”
This has led to higher fuel prices across the country. According to AAA, the national average price for regular gasoline is $3.980 per gallon as of Sunday, March 29. In western states, prices are significantly higher, with some areas averaging over $5.869 per gallon. The national average for premium fuel is $4.867, and diesel has reached $5.406 per gallon—each of these prices being about a dollar higher than before Operation Epic Fury began.
GasBuddy reports that San Francisco’s cheapest gas prices range from $5.27 to $6.29 per gallon, with an average of $5.99. Los Angeles has an average of $5.95 per gallon, although some stations offer prices as low as $4.29. San Diego sees a low of $4.99 per gallon with an average of $5.89.
Trump has recently dismissed concerns about energy prices as “some temporary short-term disruption” that “people will understand.” He wrote on Truth Social earlier this month: “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace.”
What People Are Saying
President Donald Trump posted on Truth Social last week:
“Going to make a big speech on economics in Miami. Our Military Operation in Iran is going GREAT!”
Senator Andy Kim (D-NJ) tweeted:
“You deserve a government focused on lowering the cost of gas, groceries, and healthcare. Instead they’re focused on an illegal war in Iran that you’re paying for.”
Senator Rand Paul (R-KY) said on X:
“Same excuses. Same spending. Same ‘compassion’ funded with borrowed money. We are not just overspending – we are spending money we do not have and leaving the bill with the next generation.”
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