The cost of gas typically drops after Labor Day as stations switch to cheaper winter blends and demand falls, but this year's seasonal dip may barely register at the gas pump.
Gas prices are averaging more than $4 a gallon nationally, and Labor Day travelers are braced to pay higher holiday gas prices than ever before. A year ago, regular gas averaged around $3.19 a gallon.
Historically, the fall switch to cheaper winter-blend gasoline, combined with lower post-summer demand, can shave about 10 to 30 cents a gallon from pump prices, according to AAA.
This year, though, restricted movement through the Strait of Hormuz because of the Iran war and Ukrainian strikes on Russian refineries could easily overwhelm the usual seasonal savings, and it may be months before Americans see any meaningful relief.
The high cost of fuel is already showing up in Americans' budgets, driving habits and confidence in the economy. Well before the United States and Israel launched the war in Iran, many consumers already were becoming choosier about discretionary purchases, worn down by several years of stubborn inflation and tariffs on imported goods imposed last year.
The Conference Board's Consumer Confidence Index dropped to a seven-month low of 89.4 in August from 90.2 in July amid growing economic pessimism and elevated fuel price concerns. The New York-based business research group publishes key indicators, though its report did not isolate the exact impact of gas prices.
Two-thirds of Americans said high fuel prices were causing their households financial hardship in a June Gallup poll. Fifty-seven percent said they were driving less, and 46 percent had changed their summer vacation plans because of gas prices.
Americans are stretching their gas money by topping off rather than filling up, seeking cheaper fuel at warehouse clubs and cutting spending elsewhere. Retailers say consumers are buying fewer clothes and furnishings, dining out less and sticking more closely to grocery lists as higher fuel costs eat into household budgets.
The calculations don't stop once the tank is full. Higher gas prices are changing where some people shop and what lands in the cart.
"Gas is a constant stress," Sandy Miller, an Indiana woman who cares for her disabled adult daughter, told ABC News. Miller, who said she is "falling behind a little more every month," has cut back on driving and goes without some items to afford fuel.
Trevor Chapman, a communications executive in West Hills, California, told The Associated Press that instead of going to a local independent gas station, he and his wife now plan their fuel stops around Costco stores with filling stations. The couple also is doing more online food shopping to avoid impulse buys, he said.
"Gas is a kind of catalyst," Chapman said. "It trickles down into the entire budget. We're trying to keep everything as normal as possible. But it's starting to feel like it's adding up more and more."
California has the highest gas prices in the country, averaging more than $5.70 a gallon.
People spend time at a beach as commercial vessels are anchored in the Strait of Hormuz off Bandar Abbas, Iran, on Aug. 31. (Razieh Poudat/ISNA via AP)
Many energy experts say it could be early 2027 before gas prices fall meaningfully.
Until the geopolitical conflicts are resolved, "the path for gas and diesel prices remains tilted to the upside," Patrick De Haan, head of petroleum analysis at the fuel-savings platform GasBuddy, said in a recent post.
The U.S. Energy Information Administration expects gas prices to ease, but not quickly.
The agency said in its August forecast, with its next outlook due Sept. 9, that severe restrictions on oil moving through the Strait of Hormuz will continue to hold down global supplies and keep crude prices elevated through the rest of 2026. It expects gasoline to average $3.78 a gallon this year.
More substantial relief could come in 2027. The EIA expects most Middle Eastern oil production to return to prewar levels early next year, allowing global inventories to rebuild and crude prices to fall.
Under that scenario, gasoline would average about $3.29 a gallon in 2027. The forecast depends heavily on what happens in the Middle East and could change if the conflict or shipping disruptions worsen.
A permanent resolution to these conflicts is very unlikely in the near term, although fragile local truces remain possible, according to Deutsche Bank Research, the global research arm of the Frankfurt, Germany-based commercial bank.
The Trump administration has said it is in no hurry to resolve the conflict without assurances that Iran will never acquire a nuclear weapon.
President Donald Trump said the United States has secured majority control of more than 65 billion barrels of Venezuelan oil and that the agreement will "substantially lower" what Americans pay for gas.
"This Historic Transaction MORE THAN DOUBLES American Oil Reserves, greatly increases our Oil Supply, and will substantially lower Gas Prices for all Americans, long into the future," he wrote.
Venezuela has enormous reserves underground, but reserves aren't the same as oil flowing into the market. Years of underinvestment have left the country's wells, pipelines and other infrastructure in poor shape, and producing significantly more crude will require billions of dollars and years of sustained investment.
Chevron plans to spend more than $7 billion over five years to double its Venezuelan production to 600,000 barrels a day. But analysts say enough new crude to noticeably affect prices at the pump could be five to 15 years away. That leaves the Iran war and global refinery shortages as the forces more likely to determine what drivers pay in the near term.
"Drilling and pumping that oil will take a very long time," De Haan said in a post on X. "Changes to fuel prices won't happen overnight or even in months."
Rory Johnston, an oil market researcher and founder of Commodity Context, told the Canadian network CBC that the cost and time required to extract the oil mean "the 65 billion barrels touted by Trump aren't about to flood the market and push down prices at the pump."
Tracy Shuchart, a senior economist at NinjaTrader Live, said in a post on X that the agreement is "a 100-year deal because it takes decades."
"Everyone cheering the Venezuela deal that thinks a flood of cheap oil is about to hit and pull gas prices down. It isn't," Shuchart wrote.
Amena Bakr, head of Middle East and OPEC+ research at commodities intelligence firm Kpler, agreed.
"Years of consistent major investments are needed to build new oil infrastructure for oil production to cross the 1.5 million bpd mark in Venezuela," Bakr wrote in a post on X.
The Associated Press contributed to this report.
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