First time since July 2022! U.S. gasoline prices surpass $4.54 per gallon.

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U.S. gasoline prices have reached a more than three-year high. With the ongoing stalemate in the Middle East conflict, upward pressure on pump prices has yet to peak, with both economic costs and political risks rising in tandem.

According to data from the American Automobile Association (AAA), the national average retail price for regular unleaded gasoline rose to $4.54 per gallon on Tuesday, breaking the $4.50 mark for the first time since July 2022, and just about 50 cents shy of the historical peak of $5.01 set in June 2022. From a seasonal perspective, current prices have set a new historical high for this time of year.

Since the outbreak of the Iran war, U.S. average gasoline prices have climbed more than $1.50, with persistently high fuel costs adding to inflationary pressure and severely hurting consumer confidence. Gasoline futures benchmark prices accelerated in the last week of April, surging to the highest level since June 2022—while for most of the Middle East conflict these prices hovered around $3 per gallon.

Trump has repeatedly promised publicly that pump prices will fall once the Iran war ends, but the longer prices stay elevated, the greater the blow to Republicans in this November’s midterm elections. California Governor Gavin Newsom is also under pressure—he is widely seen as a strong contender for the 2028 presidential election, while California gasoline prices have exceeded $6 per gallon, the highest in the nation.

Price Trend: From Breaking $4 to Approaching the Historical Peak

The trajectory of this oil price surge is clear. After the outbreak of the U.S.–Iran conflict, the national average gasoline price broke above $4 per gallon for the first time in mid-March. After both sides announced a pause in hostilities in April, the average price retreated slightly but never fell below $4. As tensions flared again, prices accelerated at the end of April and are now just about 50 cents from the historical record.

Regional disparities are also marked. In addition to California prices breaking $6, prices in many Midwest states are approaching $5 per gallon, putting greater financial strain on local drivers.

High oil prices are translating into concrete political risks. The Trump administration directly tied falling oil prices to the end of the war, but as the conflict drags on, the window to fulfill this promise continues to narrow. Trump’s latest statements claim "significant progress" has been made by all parties, and the market is closely watching for any breakthrough toward a substantial ceasefire.

For Newsom, the reality that California has the nation’s highest gasoline prices will become an important target of attack in his potential presidential campaign. As prospects for the 2028 election become increasingly clear, the weight of this political liability cannot be ignored.

Inventory and Demand: Morgan Stanley Warns of Possible Record Lows This Summer

Supply-side pressures should not be overlooked. U.S. nationwide gasoline inventories are currently at their lowest level for this time of year since 2014. According to Bloomberg, Morgan Stanley expects inventories to tighten further in the summer, with the possibility of hitting seasonal historical lows.

Patrick De Haan, head of petroleum analysis at GasBuddy, pointed out that $5 per gallon is a key psychological threshold for consumers; once reached, it usually triggers significant demand contraction. However, he also noted that overall U.S. consumer demand remains strong, meaning the market has not yet developed a self-correcting mechanism to curb prices in the short term, and risks of further price increases persist.

Risk Warning and DisclaimerThe market carries risks, and investments should be made cautiously. This article does not constitute individual investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions herein are appropriate for their individual circumstances. Investing based on this is at your own risk. ```