Gas Price Outlook & Summer Travel (with David Gura, Christina Ruffini)

8/23/2025 4:30:06 PM	short term cautious down	8 days later	+1.22%	-0.61%

Asks if $5/gallon gas is possible this summer if the Strait of Hormuz remains closed.

Christina Ruffini

Patrick De Haan

It's a strong possibility. 82 days into the closure, millions of barrels of oil per day are not transiting. Summer demand for gasoline, diesel, and jet fuel will increase. Global inventories are declining. If the strait remains closed into July, the national average could hit $5/gallon, a level only seen briefly in 2022.

The longer the closure, the more elevated the risk of $5 gas.

Asks about California Governor Newsom's advice to avoid Chevron and the role of state policies in high gas prices.

David Gura

Patrick De Haan

California's high gas prices are heavily influenced by state policies: cap-and-trade, low carbon fuel standard, highest gasoline taxes, and stringent refinery regulations. Texas, with similar economics but different policies, has much lower prices.

Political rules from the last 10-20 years have steered California's gas prices up.

Asks about other factors beyond the Strait closure that could push prices to $5 or higher.

Christina Ruffini

Patrick De Haan

Refinery issues are critical. Recent refinery problems in the Great Lakes caused price spikes. Refineries are tinkering with production to yield more jet fuel, which can reduce gasoline and diesel output. Hurricane season could also be a major factor.

Without refineries, none of these products exist.

Asks for a broader outlook on gas prices through July and August.

David Gura

Patrick De Haan

It's do or die. If the Strait remains closed into July 4th, $5 gas is likely. If Americans don't slow demand at $5, $6 by Labor Day is possible. Over 1.2 billion barrels of oil have already been lost. All depends on the unpredictable reopening of the Strait of Hormuz.

The U.S. and Iran seem entrenched, with little overall movement after 82 days.

SignalTube