Gas Prices Highest in Four Years Ahead of Memorial Day: Prediction Markets for Gas Prices in May

• The Strait of Hormuz remains under Iranian blockade while negotiations to end the conflict between the United States and Iran are at a stalemate
• This has resulted in gas prices approaching a four-year high just as people across the nation are preparing for Memorial Day weekend travel
• Amid growing national frustration with President Donald J. Trump’s handling of the dispute, prediction markets offer options as to where gas prices will land by the end of May

Memorial Day is generally seen as the unofficial start of summer with people taking the opportunity to hit the road for holiday weekend travel. Normally, gas prices are factored in as a necessary evil. However, the fuel market has been roiled by the conflict between the U.S. and Iran.

The Strait of Hormuz has been a point of contention since February. It has intermittently been the setting for minor skirmishes between the countries, has seen oil transports threatened and delayed, and been completely shut down as the talks between the countries stagnate.

As a result, gas prices for regular unleaded in the U.S. now average $4.55 per gallon. This is nearly twice what it was at the start of the U.S. and Israeli joint action in Iran that resulted in killing almost its entire leadership. These are the highest prices drivers have paid in almost four years. There is fear that it could hit $5 per gallon by next month if no deal is reached.

The impact of this ongoing impasse could quickly go global. As oil inventories deplete in Asia and Europe, gas, diesel, and jet fuel costs could spike. This comes just as people are planning for summer travel.

While it behooves President Trump and the Iranian leadership to forge an agreement, the sides are refusing to budge with occasional bellicose rhetoric that the hostilities could bubble up again at any time.

Prediction markets are offering options for people to express their opinion on just how high gas prices in the U.S. will go by the end of the month.

Prediction Markets for Gas Prices in May

Market volume has surpassed $1 million.

At the moment, almost all users taking part believe that gas prices will be lower than $4.30 by May 31, 2026.

About 90% think it will stay about $4.40. Then the percentages decrease incrementally. More than three-quarters of those weighing in think it will be higher than $4.45. Over half are in the camp believing it will be above $4.50. Approximately one in three think it will be over its current level of $4.55. Most think it will stay below $4.60 with a percentage thinking it will get that high hovering at nearly 15%.

For those who want to stake a position on gas prices by the end of the month, the Kalshi promo code gives new users a $10 Sign-Up Bonus after they have completed $10 in trades.

The rules stipulate that the gas price must be higher than the selected amount on May 31, 2026 according to AAA. If it does, the market resolves to Yes. For example, if the selection is $4.50, it must be higher than that by the end of the month.

See economics prediction markets for gas prices and other financial outcomes.

How Much Will Gas Cost on May 31?

The ceasefire between the U.S. and Iran seems to be holding. That is obviously a positive. But Trump is clearly growing impatient with the lack of progress and his threat to start bombing again should be taken seriously. He initially used that as a warning and negotiating tool. But as his five-plus years as president have shown, he does not make empty threats. Making matters worse is the recent news that Ayatollah Mojtaba Khamenei is refusing to surrender their enriched uranium in any deal. To Trump, that’s a non-starter as it would render the entire operation pointless.

While Trump wants to get gas prices down, his pragmatic side knows that the attempt to do so by Memorial Day is fruitless. The prices are what they are and the U.S. population will just need to deal with it. The president said as much to reporters as he reiterated that financial challenges people are facing are not a concern of his. His priority is to keep Iran from getting a nuclear weapon.

Again, this plays into the entire justification for attacking Iran in the first place. Conceding that point would be an embarrassment regardless of any other concessions he might secure. And voters are sure to remember that in November for the midterms since Democrats will not hesitate to remind them.

The question for this market is whether the gas prices will stay where they are, increase, or decrease by May 31.

Trump is seeking alternatives in lieu of an agreement with Iran and the reopening of the Strait of Hormuz. One idea he is actively promoting is to provide consumers with a federal gas tax holiday. This would lower the price-per-gallon by around 10 cents or a bit more.

Short of an agreement with Iran, the gas tax holiday is the shortest-term, most doable solution on the table. But that would not happen overnight and it’s unavoidable that certain factions with their own agenda would resist with the goal of putting the blame for the higher prices squarely on the president’s desk.

Iran is keenly aware of the pressure on Trump. Their announcement that they will not surrender their enriched uranium is likely more of a delaying tactic than an actual non-negotiable tenet for any agreement. Surely they know that Trump will not accept that.

Still, with gas prices at their current level and barring Trump following through on his threat to start bombing again, expect the sides to continue their staring contest into next week.

Tapping into emergency reserves is a method the U.S. government can use to get prices down as a short-term solution.

Regardless, gas prices won’t go higher than their current level by the end of the month. The likeliest scenario is that they will fall below $4.50 but stay above $4.45. Those with more of a negative outlook can reasonably go with the prices being above $4.50 and not be scared off from doing so given the current lack of movement.

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