On Friday, May 15th, the average retail price of benchmark gasoline in the United States rose to approximately $4.53 per gallon, an increase of over 50% compared to before the conflict, reaching a four-year high. The international crude oil market was affected by supply disruptions in the Middle East, with WTI crude oil above $100 per barrel and Brent crude oil exceeding $105 per barrel. The rapid rise in energy costs directly pushed up the US Consumer Price Index (CPI) to 3.8% year-on-year in April, with the energy component making a significant contribution.

Market participants are closely monitoring the progress of shipping in the Strait of Hormuz, the pace of strategic reserve releases, and changes in refinery utilization rates. These factors will determine the magnitude of short-term price fluctuations and the medium- to long-term equilibrium level.

Restructuring of the crude oil market under geopolitical supply shocks

The Middle East conflict disrupted shipping through the Strait of Hormuz, reducing global crude oil supply by approximately 10 million barrels per day, marking the largest single supply shock in history. Such events are not simply about reduced supply; they trigger a comprehensive reassessment of logistics chains, insurance costs, and alternative routes.

Despite some diplomatic efforts to ease tensions, physical transportation bottlenecks and market risk premiums remain high. WTI crude oil has risen rapidly from its pre-conflict range of around $70 per barrel, and the spot-futures price spread is currently showing significant volatility. Inventory data shows that U.S. commercial crude oil inventories are at seasonally low levels, and while the release of strategic petroleum reserves provides some buffer, its sustainability is limited.

Compared to the events of 2022, this round of shocks is characterized by a higher concentration of supply sources, making the speed of alternative production capacity response a key variable. Whether the efforts of oil-producing countries to increase production and the growth of non-OPEC+ supply can fill the gap will determine the price center in the second half of the year.

Gasoline retail price transmission mechanism and consumer affordability

U.S. gasoline prices rose 52% to $4.53 per gallon, directly impacting transportation costs and broad inflation expectations. Below is a comparison of recent gasoline prices and related indicators (unit: USD/gallon, crude oil: USD/barrel):

time	average gasoline price	WTI crude oil	Year-on-year inflation
End of 2025	Below 3.00	Approximately 70	lower level
April 2026	Approximately 4.26	Over 100	3.8%
Mid-May 2026	4.53	Approximately 100-102	Continuous pressure

While improved fuel efficiency and the increasing penetration of electric vehicles have alleviated some demand, gasoline prices remain a cost-sensitive factor in the short term due to the dominance of internal combustion engines in the transportation system. Rising freight rates have already begun to be passed on to consumer goods prices; traders can observe the logistics index and the energy component of the PPI as leading signals.

Policy Response Space and Macroeconomic Impact Assessment

Policymakers have discussed temporary measures, such as suspending the federal gasoline tax, to ease pressure on the retail sector. This tax, which has remained at 18.4 cents per gallon since 1993, represents a relatively small percentage of the retail price.

However, long-term solutions rely on supply recovery rather than fiscal subsidies. With inflation rising to 3.8%, uncertainty surrounding the interest rate path has increased, and market pricing indicates the Federal Reserve faces a complex trade-off between balancing growth and price stability. At the corporate level, the aviation, logistics, and chemical industries are experiencing significant cost pressures, some of which have already been mitigated through hedging or pricing adjustments.
From a global perspective, import-dependent economies face greater challenges, but the US, as a major producer, offers some buffer through the flexibility of its shale oil production. Traders need to distinguish between short-term risk premiums and structural supply and demand changes, the latter of which will shape the crude oil price curve in the coming years.

Frequently Asked Questions

Question 1: What are the potential impacts of high oil prices on the US macroeconomy and asset prices?
A: Rising energy costs are pushing up overall inflation, with the April CPI reaching 3.8%, which may delay expectations of further easing and impact interest rate-sensitive assets. On the corporate profit front, energy-intensive industries are facing pressure, while the energy production sector is receiving support. Increased volatility in the stock and bond markets may temporarily highlight the safe-haven appeal of the US dollar as a reserve currency, but its long-term sustainability depends on growth prospects.

Question 2: What are the main uncertainties surrounding future oil price trends?
A: The key factors are diplomatic progress, the shipping recovery timeline, and the increased production response from OPEC+ and US shale oil. Seasonal demand, refinery maintenance, and recurring geopolitical events will all amplify volatility. Structurally, long-term demand peak expectations and the pace of energy transition will influence the forward curve, but the short-term supply-demand gap remains the dominant variable. Market participants should continuously monitor inventory reports and shipping data to dynamically adjust their risk exposure.