Oil Analyst Warns of ‘Apocalyptic’ Gas Prices if Strait of Hormuz Remains Closed

According to independent oil analyst and keynote speaker Tom Kloza, the national average for gasoline now sits at approximately $4.44 per gallon. States in the Pacific Northwest, particularly Washington, have reached all-time highs, while the Great Lakes region is also flirting with record prices due to recent refinery problems.

President Trump announced on Truth Social that the U.S. will begin escorting ships — not just American vessels but those from around the world — that are stuck in the Strait of Hormuz. The announcement prompted a modest drop in crude oil prices and a four- to five-cent decline in gasoline and diesel prices. However, Kloza noted that such news would have triggered a much larger $10-to-$15 retreat in oil prices just one month ago, suggesting the market has become “inured” to these reports.

“When you really analyze it, it’s great to get all those people on the ships outside of the Persian Gulf so their lives can return to some semblance of normalcy, but it doesn’t mean that there’s going to be a lot of oil exiting the strait,” Kloza said. He added that the market has already lost more than 500 million barrels of oil and approximately 250 million barrels of refined products. “That’s going to hurt for a long time,” he warned. “I’m not so sure that we haven’t seen the highs yet.”

Kloza expressed particular concern for the West Coast, East Coast, and Rocky Mountain regions, noting that North America remains dependent on gasoline imports. California has seen multiple refinery shutdowns in recent years, and four refinery issues in the Great Lakes last week prompted a 50-cent jump in prices.

When asked about potential price trajectories if the strait remains closed into June, Kloza cautioned against relying on glib forecasts. “All of the experts right now are making this up as they go along. We’ve never seen anything like this,” he said. Some projections he trusts estimate oil prices could reach between $125 and $200 per barrel, which would translate to “apocalyptic gas prices of $6 and $7” per gallon.

Kloza noted that the Trump administration is “dead set against high gas prices persisting until the midterms,” but acknowledged the challenge ahead. If the strait reopens and normalizes by the end of May or in June, prices may plateau, though the disruption will “haunt the country and haunt consumers for months.” However, if the strait remains closed, he warned of $5-to-$8 per gallon gasoline in some parts of the country.

“Where else can you move 20% of the world’s energy supply or oil supply and have that impeded?” Kloza asked. “Everybody is looking at this and trying to extrapolate what it’ll mean for economies, but we’re all making it up as we go along.”