Apr 9, 2026
While $4 gas (1) is grabbing headlines and undoubtedly hitting consumers in their pockets, the real price shock hasn't landed yet. We're still in a "grace period," according to Paul Krugman (2).
Krugman's assessment is based on a recent report JP Morgan shared (3) showing a map with a timeline of rolling energy price shocks globally. Although that report was released prior to the shaky two-week ceasefire (4) recently brokered with Iran, it may still prove true. That's because resuming operations in the Strait of Hormuz isn't simple.
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"It's not a case of you just flick a switch and everything's back up again," oil and gas executive Martin Houston told the New York Times (5)(6).
For Americans, the price shock may land as early as mid-April (7), with the U.S. shifting from "a flow shock to a stock depletion problem."
According to the New York Times (8)(9), analysts still expect oil and gas supplies to remain below normal levels for some time, because even if a ceasefire holds, the wells, pipelines and liquefied natural gas (LNG) facilities still need time, repairs and safety checks before they can resume full operations.
The last tanker to leave the Strait of Hormuz was on Feb. 28, the same day the U.S. launched airstrikes alongside Israel on Iran. Iran retaliated by shutting down the Strait of Hormuz — a critical route to ships carrying oil.
Even if Iran reopens the Strait of Hormuz to tanker traffic, shipping may not resume its normal flow because companies remain cautious about volatility in the region.
At the same time, the pre-shutdown supply is still en route with the disruption to supply rippling out westward. JP Morgan's analysis shows different severity of impact per region, depending on local inventories. For the U.S., JP Morgan says most deliveries stop on April 10.
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While the ceasefire has already lowered oil prices in the short term (10), markets remain fragile as uncertainty around the war and its impact on energy supplies linger.
According to Bloomberg (11), "the world still hasn't grasped the severity of the situation."
In the meantime, existing reserves diminish and oil prices may hit a record $200 a barrel (12) if disruptions in the region continue. That could mean gas prices could be as high as $7 a gallon (13).
The buffer phase and the looming price shock
One sign suggesting that we're still in the buffer phase is that consumers have not yet adjusted their spending habits to fully reflect any rise in costs. They are looking at the crisis through a "short term lens," according to Richmond Federal Reserve Bank President Tom Barkin (14).
"Gas spending is up a lot, obviously, but the rest of spending still looks pretty healthy," Barkin added, "If you think this is a two- or three- or four-week thing, an extra $10 to $15 isn't great but it doesn't fundamentally change your standard of living."
Part of the reason could be existing reserves (15) along with an emergency stockpile release (16), paired with pricing lags and policymakers' messaging, calling the higher energy prices a "blip," (17) rather than longer-lasting.
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But some critical oil and gas infrastructure in the Gulf may never regain full operations (18), with others taking months or years to restore.
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The shock extends beyond the pump
The broader point is simple: "The world will have to significantly reduce its oil and gas consumption — but not before prices spike to a level that forces consumers and businesses to fly, drive and spend much less," reports Bloomberg (19).
It could impact anything from prices at the pump to the country's attempt to lead developments in AI (20). But on a consumer level, "the biggest oil supply shock in history" (21) will also impact the cost of goods and services.
For example, findings by the Stanford Institute for Economic Policy Research (22) suggest airline ticket prices are rising sharply and that groceries too will cost Americans more, as the agricultural supply chain deals with its own energy cost shocks.
Here too the researchers found that even if the Strait reopens, consumers will still likely continue to pay more at the pump for weeks or months longer, describing the phenomenon by saying, "The rockets go up fast, but the feathers come down slowly."
Patrick Pouyanne, chief executive officer of TotalEnergies SE recently cautioned (23) that prolonged disruptions could have longer and wider-reaching consequences: "It's clear to me if this crisis lasts more than three or four months, it becomes a systemic problem for the world."
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
AAA Gas Prices (1); Paul Krugman (2); MarketWatch (3); The New York Times (4),(5),(6),(8),(9),(10),(18); Morningstar (7),(13); Bloomberg (11),(12),(16),(19),(21); Reuters (14),(15),(20); Time (17); Stanford Institute for Economic Policy Research (22); S&P Global (23)
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Dragana Kovacevic is an associate editor for Moneywise.
