I have watched enough gas price spikes to know the feeling you get when the pump clicks past a number you did not think you would ever pay. You tell yourself it is temporary, that something will break in your favor before the next fill-up.
Kevin Hassett is basically telling you not to count on that.
The National Economic Council director said bluntly that the Iran campaign will “hurt consumers” through higher fuel costs but argued that it is necessary to confront Iran and stabilize the Middle East, In a recent CNBC interview.
At almost the same time, Trump officials were telling Fortune and Yahoo Finance that gas prices would go back to “normal in a few more months,” even though their own Energy Information Administration forecast shows something very different.
That tension is the core of Hassett’s stark message. The administration knows higher fuel costs are squeezing you, but it is not in a hurry to fix them, and the data on gas prices over the next two years quietly admits it.
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What Hassett is actually saying about gas
CNBC’s longer sit down with Hassett is framed around jobs, inflation, and the war in Iran, but the gasoline comments are the ones that cut straight into your daily life.
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Earlier in March, Hassett told CNBC viewers that oil prices would likely fall “back into the 60s” per barrel by late 2026, arguing that futures markets were already signaling relief, in an appearance on Squawk Box.
When anchor Becky Quick checked the actual futures prices on air, she pointed out that West Texas Intermediate contracts for December 2026 were trading above 75 dollars, not anywhere near the 60s Hassett was citing, according to Yahoo Finance’s recap.
In a separate segment covered by Fortune, Hassett acknowledged that higher fuel costs would “hurt consumers” but framed the pain as a trade-off for achieving U.S. military objectives in Iran.
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That combination is what bothers me as someone who thinks about household budgets. You have an official line that this is temporary and manageable, and then you have the numbers behind the scenes that tell a different story.
The uncomfortable math on future gas prices
The Energy Information Administration just raised its forecast for 2026 and 2027 gasoline prices in its latest outlook. The EIA now expects average U.S. retail gasoline prices to be around $3.34 per gallon in 2026 and $3.18 in 2027, including taxes.
Those numbers may not sound terrifying at first, but context matters.
In February, before the Iran conflict escalated and the Strait of Hormuz was effectively shut, the EIA thought 2026 gas would average $2.91 and 2027 would come in around $2.93. That means the official forecast for what you will pay at the pump over the next two years has been lifted by roughly 15% in a matter of weeks.
More importantly, the EIA now says it does not see gasoline prices dropping below $3 per gallon at any point between now and the end of 2027, even in a scenario where oil flows through Hormuz start resuming this spring. In its latest analysis, the agency wrote that “normalization of refining and retail margins will occur more slowly” and that elevated prices are likely to stick even as crude oil cools off, the IER noted.
The AAA data you are living with right now backs that up.
The national average price for regular gasoline pushed above $4 per gallon in late March and early April, hitting $4.08 on April 2 and $4.11 on April 5, the highest level since 2022, the auto group reported. The average regular price crossed $4.01 per gallon on March 31, up from just under $3 a month earlier, according to data from AAA and GasBuddy cited by Rigzone.
So when Hassett talks about the pain as temporary, the best case scenario his own administration is running with still keeps your gas budget higher for years than it was supposed to be.
Why this matters more than a few extra dollars at the pump
I recently read a breakdown of how rising gas prices were eating into Americans’ 2026 tax refunds, and it made the stakes very real.
Analysts at Raymond James calculated that a sustained 20 dollar per barrel increase in crude oil would effectively wipe out the entire fiscal benefit of Trump’s One Big Beautiful Bill tax cuts, because the extra money you got back from the IRS ends up going straight into your tank, in a note summarized by TheStreet.
Raymond James strategist Tavis McCourt used a rule of thumb that every 10 dollar increase in crude adds about 25 cents to the price of a gallon of gasoline and translates into roughly $150 billion more in annual consumer spending on fuel, CNBC noted.
Those are dollars that do not go to groceries, debt payments, or savings.
The AAA numbers show how quickly that dynamic hits.The group’s daily fuel gauge found that the national average jumped from $2.91 per gallon in February to $3.72 by mid March and then over $4 by the start of April. That adds up fast if you are commuting, running a small business, or just trying to keep a family car on the road.
The EIA’s revised outlook effectively raises 2026 oil prices by 36% and gasoline by about 15% versus prewar expectations, calling it a “persistent tax on consumers” layered on top of existing inflation, economists at the Institute for Energy Research noted.
From where I sit, Hassett’s message is stark because it asks you to accept that tax and to trust that the strategic goals behind it are worth what they will do to your everyday budget.
What Hassett’s stance signals to investors
If you invest in anything from airlines to grocery chains, you cannot treat this as a simple consumer story.
The EIA’s latest oil market report and the International Energy Agency’s March analysis both point to a world where the Iran conflict and the Hormuz disruption have created the largest oil supply shock in history, but where demand is not collapsing, Reuters noted.
The IEA now expects global oil demand to grow by around 640,000 barrels per day this year, down from earlier forecasts but still positive, even as prices stay higher and consumers pull back in other areas. That means energy producers, refiners, and midstream companies are looking at elevated prices with relatively modest demand destruction, at least for now.
For equities, that mix does a few things:
- It supports earnings for energy stocks, especially those with exposure to gasoline and diesel refining.
- It pressures margins for transportation, retail, and consumer discretionary companies that cannot pass all the costs on.
- It complicates the inflation and interest rate outlook, which feeds back into valuations across your portfolio.
When Hassett tells CNBC there has been “no discussion” of using the Strategic Petroleum Reserve to bring down prices quickly, he is signaling that the administration is not planning to slam the brakes on this dynamic in the short term.
As an investor, you have to decide whether you are positioned for a world where fuel stays more expensive than it was supposed to be and where policymakers are not rushing to change that.
How to respond as a driver and an investor
When I try to turn this kind of macro story into something I can act on, I break it into two buckets: your daily life and your portfolio.
On the daily life side:
- Assume elevated gas is the new baseline for at least the next 18–24 months, not a one month shock.
- Adjust your budget accordingly, whether that means consolidating trips, carpooling, or even revisiting your commute if you have that flexibility.
On the investing side:
- Stress test your holdings for higher for longer fuel costs, looking closely at any companies that rely heavily on shipping, travel, or thin consumer margins.
- Consider whether you have enough exposure to businesses that benefit from or at least withstand higher energy prices, like certain energy infrastructure and utilities.
What I ended up taking from Hassett’s comments was not just frustration at the gap between the talking points and the forecasts.
It was a reminder that when gas prices jump because of policy and war, not just random market noise, you have to treat them as part of the story of your money, not just an annoying line on this month’s bank statement.
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