Drivers heading into Memorial Day weekend are set to face some of the highest regular gasoline prices at the pump in years.
With the U.S. national average sitting at $4.53 per gallon (according to AAA data) and no resolution yet on a U.S.-Iran peace deal or the reopening of the Strait of Hormuz, pump prices risk rising even higher into the holiday weekend as the summer driving season begins.
Let's start with the chart of the day: AAA retail gas prices in the U.S. on a seasonal basis closely track the 2022 run, when the Russia-Ukraine conflict was in its first several months.
Gas prices in 2022 did not top out until mid-June.
The impending problem, with no near-term Hormuz resolution, as JPMorgan analysts recently warned, is that the world is spiraling toward a catastrophic cliff-edge shortage of crude oil if the maritime chokepoint remains blocked into June.
Former CIA analysts and current RBC commodities head Helima Croft told clients days ago that she is "very skeptical of a June grand reopening or even that maritime traffic will return to February 27 levels for the foreseeable future."
AAA Retail Gas Price Map
For Memorial Day 2026, AAA forecasts around 39.1 million Americans will travel by car, representing 87% of all holiday travelers. That will create a meaningful near-term lift in gas demand, especially from Thursday through Monday.
EIA notes that gas demand typically rises into the summer driving season, while last year's Memorial Day period coincided with the highest weekly implied gas demand of 2025 up to that point.
So, in an already tight gas market, a busy Memorial Day driving weekend can certainly pull more barrels through the system, support pump prices, and may only lead to higher prices if no Hormuz resolution is found in the near term. The demand destruction level sits around $5.
Tyler Durden Tue, 05/19/2026 - 15:40Update(1500ET): A WSJ report Tuesday afternoon has revealed that the US seized an "Iran-linked ship" in the Indian Ocean overnight, which had not previously been revealed, at a moment President Trump is threatening to resume airstrikes on Iran, but has given a few more 'days' for Tehran to come to the table.
"The tanker, called Skywave, was sanctioned by the US in March for its role in transporting Iranian oil," the report says. These kind of high seas interdictions are happening with semi-regularity at this point, especially in waters of south and southeast Asia. The report details:
Ship-tracking data showed it sailing just west of Malaysia on Tuesday after transiting the Malacca Strait. The ship was likely loaded with more than a million barrels of crude at Iran’s Kharg Island in February, according to brokers and data from Lloyds List Intelligence.
It marks at least the third time the U.S. has seized an oil tanker in connection with its crackdown of Iran-linked shadow-fleet vessels.
Meanwhile, also on Tuesday VP JD Vance had a meeting with the president related to the Iran crisis, and engaged in another testy exchange with the media:
COLLINS: You last week denied that the president said he was not taking Americans' financial situation into consideration when he's making decisions on the Iran war. He's since said it again, calling it a 'perfect statement.'
VANCE: See Kaitlan, what you did is you… pic.twitter.com/FFy9MTUkQ9
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Update(1140ET): President Trump has on Tuesday while fielding questions from reporters repeated his line that Iran is 'begging' for a deal. "They're begging to make a deal. I hope we don't have to do the war, but we may have to give them another big hit. We may have to give them another big hit. You'll know very soon."
His threat to give them another "big hit" was coupled with the assertion that he was just one hour away from ordering new attacks on Iran Monday, but was asked by Gulf allies to given diplomacy just a little longer:
Trump: "I was an hour away" from striking Iran on Monday.
There was also the below moment where he again talked timeline, saying he's ready to resume military action in a few 'days' if Iran doesn't comply:
Reporter: How many days does Iran have to come to the table?
Trump: Two or three days. Maybe Friday, Saturday, Sunday. Maybe early next week. A limited period of time. pic.twitter.com/yAAfv2jR20
Iran for its part says it stands ready to "confront aggression" and remains in a high state of military alert.
Also, tensions with nearby Gulf states are still soaring, and amid reports that drones have recently been launched from Iraqi territory - likely the work of Shia paramilitary organizations which are closely allied with Iran.
(Reuters) - The United Arab Emirates' Defence Ministry said on Tuesday that a drone that caused a fire at its nuclear power plant on Sunday had been launched from Iraq.
Emirati officials have said the UAE has the full right to respond to such "terrorist attacks". https://t.co/Skv8LEkkRy
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In a huge and unexpected announcement, amid stalled US-Iran peace talks - which have proven a failure and illusive thus far, NATO now says it could deploy military assets to forcibly reopen the Strait of Hormuz. Per breaking newswires Tuesday late morning:
NATO TO CONSIDER HORMUZ DEPLOYMENT IF STRAIT NOT OPEN BY JULY
President Trump has continuously chastised the NATO alliance for being largely bankrolled by Washington but at the same time fence-sitting when it comes to forming a coalition to patrol and reopen the vital energy transit waterway. Oil plummeted on the initial headline, seeing in it a positive for the potential that crude transit in the Persian Gulf could again be opened up soon:
And Bloomberg freshly reports:
NATO is discussing the possibility of helping ships pass through the blocked Strait of Hormuz if the waterway isn’t reopened by early July, according to a senior official in the military alliance.
The idea has support from several members of the North Atlantic Treaty Organization, but doesn’t yet have the necessary unanimous support, said a diplomat from a NATO country. Both officials spoke on the condition of anonymity. Leaders from NATO countries will meet in Ankara July 7-8.
But July feels very far away at this point, and anything could happen between now and then, as Washington continues to threaten renewed military action, and Iran says it remains on high alert.
NATO defense chiefs are meeting this week, where also high on the agenda will be the following:
At this week's summit, military chiefs from all 32 member states will examine the impact that consistent rapid consumption may have on NATO's collective capabilities and deterrent power as Russia continues to threaten allies.
Tyler Durden Tue, 05/19/2026 - 15:04By Tsvetana Paraskova of Oilprice.com
Nigeria should market its crude oil to new buyers as the UAE’s decision to leave OPEC is dislocating the balance that the cartel and the OPEC+ group have been seeking for years, according to Wole Ogunsanya, chairman of the Petroleum Technology Association of Nigeria (PETAN).
The official urged Nigeria’s state oil and gas firm NNPC and other producers of Nigerian crude to tap new markets.
“When OPEC gives you a quota, it’s left for you to find who is going to buy it,” Nigerian outlet This Day quoted Ogunsanya as saying.
“And we have one of the best crude oil in the world. So we need NNPC and all producers to market Nigerian production,” the official added.
The abrupt exit of the United Arab Emirates from OPEC and OPEC+ would disrupt the balance the groups have been keeping for years, according to Ogunsanya.
“The decision by the UAE, which they have a sovereign right to do, is for their country’s interest. Our opinion is that it’s going to cause a dislocation of that equilibrium, the ability of OPEC and OPEC+, to manage the price of oil,” he added.
The UAE quit OPEC effective May 1 to pursue its national interests after years of quarreling with fellow cartel members over output quotas and their share of total production capacity.
For years, the UAE has been working to boost its crude oil production capacity to 5 million barrels per day (bpd) by 2027. The UAE insisted that it should be allowed in the OPEC and OPEC+ production deals to actually use more of its growing spare capacity. The country, alongside Saudi Arabia, is one of the few in the region – and the world – that held spare production capacity before the Middle East conflict began.
Nigeria, for its part, has struggled to pump to its quota in recent years as sabotage often led to force majeure at major export streams. However, with a recent crackdown on oil theft and sabotage in the Niger Delta, Nigeria has managed to increase crude production and aims for further growth by 2030.
Tyler Durden Tue, 05/19/2026 - 15:00