Americans already paying near-record prices at the pump got a grim forecast Friday: JPMorgan Chase analysts said the risk of $5-a-gallon gasoline is real, driven by the ongoing war with Iran and the supply crunch it has forced on global fuel markets.
The warning landed just weeks before Memorial Day, the unofficial start of the summer driving season, when demand for gasoline typically surges. Prices have already climbed sharply since March, and the bank's analysts say the worst may not be over.
In a note published Friday, JPMorgan analyst Natasha Kaneva and her team laid out a scenario in which crude oil prices stabilize near $100 a barrel while refined fuel prices, gasoline, diesel, jet fuel, keep climbing on their own. That dynamic, they warned, could push the national average past the $5 mark, a threshold American households have rarely faced. The Independent reported the analysts' conclusion in stark terms: the risk of $5 gas "can no longer be dismissed."
The trajectory has been steep. U.S. gasoline prices crossed above $4 a gallon in March for the first time in four years, after shipping through the Strait of Hormuz ground to a halt over fears of Iranian attacks on tankers. The strait handles roughly 20 percent of the world's oil supply, and its effective closure sent crude prices soaring.
A temporary peace agreement between the U.S. and Iran in mid-April briefly eased the pressure. But the relief was short-lived. By early May, fuel costs had climbed again, nearing $4.50 a gallon.
As of Monday, May 4, AAA pegged the national average at $4.46. The JPMorgan note itself cited a figure of $4.55, a number the New York Post confirmed as AAA's reading on Friday, representing a 52 percent jump from pre-war levels.
That kind of increase hits fast and hard. Consider the Ford F-150, America's best-selling truck, with its 36-gallon tank. At $4.46 a gallon, a full fill-up costs $160.56, up $46.44 from $114.12 a year ago. That is a 40 percent increase for a vehicle millions of working Americans depend on every day.
What makes the JPMorgan warning different from a standard crude-oil scare is the mechanism the analysts described. Kaneva's team argued that limited crude supplies are constraining refinery output, and that the real pain is shifting from the price of a barrel of oil to the price of what comes out of the refinery.
"If refinery runs continue to be constrained by limited supplies of crude, fuel prices, rather than crude prices, may become the 'primary transmission channel for demand destruction.'"
In plain English: even if crude steadies around $100, the gap between raw oil and finished gasoline could keep widening. Refiners simply cannot produce enough fuel to meet demand when their feedstock is choked off.
The analysts went further, describing a scenario that breaks from the usual playbook of oil shocks. The Hormuz blockade that stranded millions of barrels earlier this year created a bottleneck that is still reverberating through the refining chain.
"The next phase of the shock then may look less like a classic crude spike and more like a refining and end-user fuel crunch."
The New York Post noted that refiners have also been prioritizing jet fuel production over gasoline and diesel, a shift that could further squeeze pump-price supply just as summer demand ramps up.
Patrick DeHaan, head of petroleum analysis at the tracking site GasBuddy, posted on X that Americans have spent $23.9 billion more on gasoline year-over-year since March 1 because of the Iran war's impact on fuel prices. He broke the figure down: $6,462 a second, $23.3 million every hour.
To put that in perspective, the article noted the added gas spending is just $1 billion shy of U.S. costs for the war itself. That comparison, the fuel bill nearly matching the military bill, captures the scale of the economic hit ordinary Americans are absorbing.
Those billions do not come from nowhere. They come from household budgets, from the family that skips a weekend trip, from the small-business owner who eats the delivery surcharge, from the commuter who watches the pump counter spin past $80 and keeps going. Higher gasoline spending has already distorted retail sales figures, making headline numbers look stronger than the underlying consumer picture warrants.
The JPMorgan analysts did not mince words about the calendar.
"The timing could hardly be worse. The US driving season unofficially begins with Memorial Day at the end of May."
Summer driving season historically pushes gasoline demand, and prices, higher even in normal years. Layer that seasonal pressure on top of a supply crunch driven by a foreign conflict, and the math gets ugly fast.
The ripple effects extend well beyond the gas pump. When fuel costs surge, transportation costs follow, and those costs land on the price of groceries, building materials, and consumer goods. Rising grocery prices tied to energy shocks are already weighing on household budgets and shaping voter frustration heading into the midterm cycle.
Airlines face the same squeeze from a different angle. Refiners prioritizing jet fuel may help carriers in the short term, but the broader oil-cost surge has already prompted warnings of steep ticket-price increases. United Airlines has warned that fares could jump 20 percent through 2027 as oil costs remain elevated.
The facts in this story tell a clear tale. In early March, a geopolitical crisis shut down a critical shipping lane. Prices spiked. A temporary deal in mid-April provided a brief reprieve. The reprieve failed to hold. And now, with summer approaching, one of the largest banks on Wall Street says $5 gas is a genuine possibility, not a scare tactic, but a plausible outcome of constrained refinery capacity and ongoing conflict.
None of these price increases are abstract. They land on the family filling up the F-150 for $160. They land on the commuter driving a Toyota Camry, described as the country's most popular sedan, who watches the monthly fuel budget creep toward levels that crowd out other spending. They land on the $23.9 billion in extra gasoline costs Americans have shouldered since March 1.
Energy policy is not a luxury debate. It is the most direct line between geopolitical decisions and the price a working family pays to get to work, pick up groceries, and keep the lights on. When supply is this tight and prices are climbing this fast, every policy choice that constrains domestic production or delays refinery capacity becomes a choice to leave American consumers more exposed to foreign shocks.
The JPMorgan note frames the problem in analyst language, "demand destruction," "product cracks," "transmission channels." But the translation is simple. American families are paying more, and they may soon pay a lot more, because the global fuel supply cannot keep up with demand.
When $5 gas arrives, if it arrives, it will not be a surprise. The warning has been issued. The question is whether anyone in a position to act treats it with the urgency it deserves, or whether the people who fill up those tanks every week are, once again, the last ones Washington thinks about.