US gas prices have jumped sharply ahead of the midterm elections. The average price of regular gasoline in the US reached $4.32 per gallon last Monday, according to the latest weekly data from the Energy Information Administration (EIA). The price has risen by nearly 25 cents in just two weeks.
The $4.32 price is unusually high for this point in an election year. EIA data going back to 1990 shows that US gas prices are higher at this stage of the election cycle than in any recent election year, according to Yahoo Finance’s analysis. There are only 49 days left before the midterm election.
US gas prices and oil prices
The second-highest gas price at this point before an election was $3.88 per gallon in 2012. The third-highest was $3.65 in 2022. Both years had Democratic presidents, while Republicans made high gas prices a major political issue.
Trump himself previously attacked high gas prices when Barack Obama was president. In 2012, then-private citizen Donald Trump posted on social media about high gasoline prices and blamed Obama. The issue has now become more politically difficult for Trump because he is president while prices are rising.
The biggest reason behind the current pressure is the global oil market. Gasoline prices are closely linked to crude oil prices. Current oil markets are being affected by wars and disruptions involving Iran and Ukraine, which are creating concerns about global energy supplies.
Middle East oil supply
Middle East disruptions are making it harder to bring prices down. Wider disruptions in the Middle East are putting additional pressure on energy markets. This matters for US drivers because disruptions to oil supplies can push crude prices higher, which can eventually raise gasoline prices at the pump.
The US Strategic Petroleum Reserve is also in a weaker position. The Strategic Petroleum Reserve (SPR) is at historically low levels after months of withdrawals. That leaves the administration with less emergency oil stock available to respond to another major supply disruption.
Also read: Oil prices hit 11-day low: How US-Iran talks, Saudi shipments drive crude lower
US diesel prices
Diesel prices are creating another problem for the US economy. Diesel prices have also reached record levels. The American Automobile Association (AAA) said the average diesel price hit nearly $6.27 per gallon last Tuesday, another all-time high.
Expensive diesel can affect more than just drivers. Diesel is widely used by trucks and other commercial vehicles. Higher diesel costs can therefore increase transportation expenses and put pressure on the prices of goods moving across the country. Energy analyst Andrew Lipow said higher gasoline and diesel prices could be felt across a wide range of consumer goods.
Gas prices before winter
Normally, gas prices would be expected to fall around this time of year. Gasoline prices usually decline in the fall because US refiners switch from the more expensive summer-grade gasoline to a cheaper winter-grade formulation. Andrew Lipow, president of Lipow Oil Associates, said this seasonal change normally gives consumers some relief.
But analysts say this year is not following the normal pattern. Lipow said this has been “anything but a typical year” because the large increases in gasoline and diesel prices are wiping out the seasonal savings consumers normally expect in the fall.
Winter gas prices
The winter gasoline switch may provide some relief, but it may not be enough. GasBuddy’s Patrick De Haan said the move to cheaper winter-blend gasoline could help lower prices. However, he warned that continuing geopolitical tensions could prevent meaningful price relief in the near term.
Drivers should therefore expect more price swings. De Haan said motorists should prepare for continued volatility because the energy market remains heavily affected by geopolitical developments.
Gas prices vs 2024
Gas prices are now more than 35% above their level at this point in 2024. At the same stage of the 2024 election, gasoline was around $3.18 per gallon. The current $4.32 average represents a major increase compared with that level.
That makes gasoline a particularly difficult issue for Trump ahead of the midterms. During his 2024 campaign, Trump repeatedly criticized the Biden administration over energy prices and promised to reduce costs for Americans. At a campaign event almost exactly two years ago, he said, “We’re going to bring your energy prices down.”
Trump gas price plan
Trump is still promising lower energy prices, but he is now pointing to international conflicts. Trump has recently said oil prices could “drop like a rock” if the war involving Iran ends. He has also said Ukraine should stop attacking Russian oil refineries because such strikes can affect energy markets.
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A temporary drop in diesel prices showed how sensitive the market is to war-related news. Trump briefly pushed diesel prices lower last Monday after posting that Russia and Ukraine had agreed to stop attacking energy targets. However, energy-related strikes continued, and the price relief did not last.
Trump has limited options to quickly bring gasoline prices down. One possible step would be restricting US oil exports so more crude stays in the domestic market. But energy experts have warned that such a move could have unintended consequences and could ultimately push prices higher.
An oil export ban could help prices initially but create bigger problems later. Charlie McElligott of Nomura Securities said an export ban could reduce prices in the short term, according to Yahoo Finance. But if US refiners respond by cutting capacity, the move could eventually cause prices to rise again.
That is why the gas-price problem is becoming a major economic and political challenge before the midterms. Gasoline is already at a historically high level for this point in an election cycle, while oil supply risks, Middle East disruptions, the Russia-Ukraine war and record diesel prices are keeping pressure on the energy market. The normal fall decline could offer some relief, but analysts quoted by Yahoo Finance do not expect a major drop in the near term.
