Gas prices near highest level in 4 years ahead of Memorial Day
Gas prices stand near their highest level in four years as millions of Americans ready themselves to hit the road over Memorial Day weekend.
The national average for a gallon of gas on Friday stood at $4.55, which amounts to a roughly 42% rise from this time last year, AAA data showed. Gas prices surged in recent months as the Iran war choked off global oil supply.
Six states boast average gas prices above $5, including Washington and Alaska. California, the state with the nation's highest gas prices, offers drivers an average gallon of $6.13, according to AAA.
Roughly 39 million people are expected to travel by car over the Memorial Day holiday, exceeding last year’s total, AAA forecasted.
"Travel demand remains strong, and despite higher fuel prices, many people are prioritizing leisure travel," Stacey Barber, vice president of AAA travel, said in a statement.
Americans will spend about $2 billion more on gasoline over the four-day Memorial Day weekend compared to a year ago, amounting to an added cost of roughly $22 million per hour, Patrick De Haan, a petroleum analyst at GasBuddy, said in a post on X on Friday.
Nineteen states are expected to post record-high Memorial Day gas prices, among them Colorado, Ohio, Missouri and New Mexico, De Haan said.
Crude oil is the main ingredient in auto fuel, accounting for more than half of the price paid at the pump, according to the federal U.S. Energy Information Administration. The Middle East conflict triggered a historic oil shortage, driving up crude prices and hiking the cost of auto fuel.
The surge in oil prices came about after Iran effectively closed the Strait of Hormuz, a maritime trading route that facilitates the transport of about one-fifth of global crude supply.
The U.S. West Texas Intermediate futures price -- a benchmark of U.S. oil prices – has soared 50% since the outbreak of war on Feb. 28.
The U.S. is a net exporter of petroleum, meaning the country produces more oil than it consumes. But since oil prices are set on a global market, U.S. prices move in response to swings in worldwide supply and demand.
Oil prices have fallen slightly this week, however, as negotiations have given rise to hope among traders about a possible resumption of normal tanker traffic in the Strait of Hormuz.
As a result, De Haan said, gasoline prices may drop over the weekend, falling to an average below $4.50 by Memorial Day.
Roughly one of every 10 low-income households is spending more than 10% of its monthly income on gas, Bank of America said in a research report shared with ABC News last month, citing internal data. For middle- and upper-income households, the share spending that much on gas drops stands at about one of every 20.
Oil prices remain well below the highs reached after some previous economic shocks. In 2022, the price of Brent crude surged above $139 per barrel in March, just weeks after the Russian invasion of Ukraine. During the 2008 financial crisis, U.S. oil prices shot up as high as $147 a barrel.
