Gas prices back up as July ends. And lower supplies will keep them high

As the US and Iran cranked up its military bombings in the Middle East this week, it drove up oil prices further, ending the week up more than 30% from where we were at America's 250th birthday.

But it’s not just speculation on fear of what might happen in the future that’s driving up those oil prices, as our real-life supplies are continuing to get more scarce today. We drew another 5.06 million barrels off of the US’s Strategic Petroleum Reserve (SPR) last week, bringing the total pull over 100 million barrels since the Trump Administration started using the SPR to try to stabilize oil and gas prices in April.

Not only are oil reserves shrinking, but so is the amount of gasoline that’s on the market in America. That’s a striking contrast to what was happening at this time in 2022, which was the last time pump prices were over $4 a gallon nationwide. 4 years ago, gas stockpiles were growing.

And unlike July 2022, gas prices have gone back on the rise in the US in July 2026, up nearly 15 cents in the last week. Given the short supplies, higher oil futures, and Trump/GOP’s inability to fold their losing hand, it seems likely that August 2026 will have higher gas prices than we saw August 2022.

In addition, Tropical Storm Bertha shut down production at a Chevron refinery for a while this week, so that cut another 2 million barrels of oil off the market.

The low supplies in the States and the need to replenish that low SPR amount sooner than later means it oil might well be taken off the market in the later part of this year instead of being added. So I wouldn’t count on gas prices going down any time soon, and with that in mind, I also can’t see Americans’ already-declining savings rate turning around for much of the rest of 2026.

Sure, we'll likely see an increase in savings for June when that gets reported next week due to that month's drop in prices. But we know prices are going back up for July, and I can't think there was a big boost in income to offset that.

So any improving feelings that consumers may have had when gas dropped down is likely to go away when they see that big 4 in front of the pump price again. And if it stays that way in August (as it likely will), they might be even more stressed than they were when consumer sentiment was hitting record lows in May.