US Gasoline Prices Expected to Top $4 for First Time on Labor Day... Trump on Alert Ahead of Midterm Elections

Nearly $1 Higher Than Last Year...Breaking the Previous Labor Day Record Set in 2012
U.S. Refinery Operating Rate Hits 98% as Inventories Fall Below Five-Year Average
Trump Pressures Refiners to Lower Prices in Meeting with Oil Industry

As military tensions rise in the Middle East, international oil prices are surging again, with gasoline prices in the United States expected to exceed $4 per gallon for the first time ever during Labor Day weekend, based on Labor Day standards.

Fuel nozzle installed on a vehicle at a gas station in Los Angeles, California, USA. Photo by AFP

On September 5 (local time), U.S. fuel information service GasBuddy projected that the national average gasoline price on Labor Day, September 7, would reach $4.03 per gallon. This is 87 cents higher than last year's Labor Day price of $3.16. According to GasBuddy, the previous Labor Day record high was $3.83, set in 2012.

In fact, U.S. gasoline prices have already surpassed $4 per gallon. According to the American Automobile Association (AAA), the national average price for regular gasoline on September 5 stood at $4.1459 per gallon—about 94 cents higher than last year's $3.2046. AAA also predicted that gasoline prices during this year's Labor Day holiday would mark a record high for this season.

The main reason for the price increase is the instability in global crude oil supply caused by military clashes between the United States and Iran. According to the Associated Press, tensions have escalated after the two countries engaged in renewed military actions around the Strait of Hormuz and U.S. forces struck three Iranian oil tankers. Concerns over disruptions to crude oil shipments through the Strait of Hormuz also persist.

International oil prices have climbed above $90 per barrel. According to Korea National Oil Corporation's Opinet, on September 4, Brent crude closed at $96.28 per barrel, while U.S. West Texas Intermediate (WTI) settled at $91.48 per barrel. The Associated Press also reported that the intensifying U.S.-Iran clashes and concerns about oil transport disruptions are fueling rising global oil prices and inflationary pressure within the United States.

The decrease in domestic gasoline inventories is another factor contributing to the price hike. According to the U.S. Energy Information Administration (EIA), as of August 28, U.S. gasoline inventories stood at 257 million barrels, a decline of 1.2 million barrels from the previous week. This is 6% lower than the five-year average. Commercial crude oil inventories also dropped by 4.5 million barrels in one week, totaling 424.5 million barrels.

On the other hand, refinery operations are running at virtually maximum capacity. According to the EIA, U.S. refinery operating rates reached 98.0% as of August 28. The daily crude oil throughput was about 17.5 million barrels, an increase of 102,000 barrels from the previous week.

The U.S. administration has also relaxed some gasoline-related regulations to help expand supply. On August 20, the Environmental Protection Agency (EPA) announced an emergency measure to relax restrictions on low-volatility summer gasoline earlier than planned. As a result, from September 1, early sales of winter-grade gasoline have been permitted. The EPA stated that this will enable the supply of several hundred thousand additional barrels of gasoline per day.

Diesel prices are rising even faster. According to AAA, as of September 5, the national average diesel price was $5.8819 per gallon, marking an all-time high. This is more than $2 higher than last year's $3.7123.

The burden of travel costs is also increasing, not just fuel costs. The Associated Press noted that domestic airfares in the U.S. for this Labor Day holiday are approximately 20% higher than last year. Gasoline prices are also around 90 cents higher per gallon compared to a year ago.

High fuel costs are becoming a burden for President Donald Trump and the Republican Party, with roughly two months remaining until the midterm elections in November. President Trump has made lowering energy prices a key economic policy, but gasoline prices have remained around $4 per gallon since the clashes between the U.S. and Iran began.

On September 1, President Trump met with executives from U.S. refineries and fuel distribution companies at the White House to discuss gasoline prices and ways to expand refinery capacity. According to Bloomberg, President Trump called on refiners to increase production of gasoline and diesel during the meeting. The White House also stated that it discussed ways to expand refining capacity through deregulation, shortening permit processes, and additional investment.

This content was produced with the assistance of AI translation services.