US Gasoline Hits 4.12 Per Gallon and Diesel Nears 5.80 as EIA Projects April 2026 Peak from Hormuz Supply Crunch

US retail gasoline prices reached $4.12 per gallon on Tuesday, according to the American Automobile Association, while the U.S. Energy Information Administration projects diesel will peak above $5.80 per gallon this month, with both benchmarks sitting at their highest seasonal levels on record as supply disruptions in the Strait of Hormuz drive crude costs to multi-year highs.

Bloomberg reported Tuesday that US gasoline and diesel pump prices have reached all-time seasonal highs for mid-April, a period that historically precedes the summer driving season demand surge. The EIA April 2026 Short-Term Energy Outlook projects gasoline will average close to $4.30 per gallon at its April monthly peak before easing through the remainder of the year, finishing 2026 at an average of $3.70 per gallon.

Hormuz Disruptions Push Brent Toward Q2 Peak

The EIA attributes elevated consumer fuel prices directly to the Strait of Hormuz supply crisis. OPEC+ output fell by 7.9 million barrels per day in March due to the shutdown of shipping lanes through the strait, and the EIA expects total production shut-ins to reach 9.1 million barrels per day in April as the blockade continues to affect Gulf state exporters.

The Brent crude spot price averaged $103 per barrel in March. The EIA outlook projects Brent will peak at $115 per barrel in the second quarter of 2026 before easing as production disruptions gradually abate, finishing 2026 at an average of $96 per barrel. The spread between Brent and WTI widened sharply in March as Middle East conflict increased shipping costs and reduced oil flows from the region, temporarily boosting Brent premium over the US benchmark.

WTI crude fell to approximately $92 per barrel on Tuesday as markets responded to reports that Iran had resumed diplomatic contact with US negotiators seeking to extend a two-week truce. Retail fuel prices have begun easing slightly in recent days, but analysts caution that prices remain well above year-ago levels and the seasonal peak may still lie ahead before demand normalizes heading into summer.

Diesel Prices Pose Largest Burden on Transport and Freight

Diesel prices carry particular significance because they directly affect the cost of freight transport, agricultural operations, and industrial fuel users across North America. The EIA projected April peak above $5.80 per gallon is well above 2025 spring levels. The agency forecasts diesel will average $4.80 per gallon across all of 2026, declining to approximately $4.11 per gallon in 2027 as crude prices normalize in response to easing Hormuz disruptions.

Major US refiners including Valero Energy and Marathon Petroleum, both among the largest suppliers to the US retail fuel market, benefit from wider crack spreads when crude prices surge but retail demand remains relatively inelastic. Domestic refiners are largely insulated from the direct supply disruptions affecting Middle Eastern crude flows, since the US draws primarily on domestic Permian Basin production and Canadian imports rather than Gulf state exports.

Canadian Heavy Oil Producers Capture Higher Netbacks

The price spike has carried benefits for Canadian producers. Western Canadian Select heavy crude, which typically trades at a discount to WTI, has risen alongside the broader crude complex. With WTI at recent highs above $100 per barrel, WCS delivered netbacks improved materially even accounting for the roughly $12 per barrel differential. The Trans Mountain Expansion pipeline continues to provide Alberta oil sands producers access to Pacific Basin markets, helping narrow the historical landlocked discount during a period when Asian refiners are scrambling for non-Hormuz crude supplies.

Near-Term Relief Depends on Diplomatic Progress

With the Hormuz crisis unresolved, the EIA base case anticipates gradual price relief through 2026 as production shut-ins slowly abate rather than a sudden crude market correction. The agency projects Brent averaging $76 per barrel in 2027, which would translate to more normalized retail gasoline in the $3.50 to $3.80 range.

The near-term trajectory depends heavily on whether US-Iran negotiations produce a durable ceasefire or a longer agreement covering Hormuz shipping access. Analysts at ANZ Research had raised Brent forecasts above $90 per barrel as the crisis escalated, but the renewed diplomatic signals have introduced uncertainty about the pace of supply restoration. ExxonMobil, which operates one of the largest US refinery complexes at Baton Rouge, Louisiana, and is a major supplier of both gasoline and diesel to eastern US markets, has not commented on how the current price environment is affecting its downstream margins in the second quarter.

The EIA publishes weekly retail fuel price data every Monday, with the next update set to reflect prices through the week ending April 14. With WTI retreating from its Hormuz-driven peak but the crisis not yet resolved, US pump prices are likely to remain well above long-term averages through the remainder of April and into the summer driving season.