Prediction market traders are increasingly betting that U.S. gas prices will reach new highs in 2026, driven by the recent surge in oil prices and escalating geopolitical tensions. On the Kalshi prediction market platform, there is a 71% probability that the national average gas price will exceed $4.60 per gallon in 2026, surpassing the previous yearly peak of $4.56 recorded on May 21, according to AAA data [1]. Additionally, traders assign a 57% chance that prices will rise above $4.80 per gallon, and just over a 40% likelihood that they will cross the $5.00 mark. The last time U.S. gas prices reached a record high of just over $5 per gallon was in June 2022 [1].
The recent climb in U.S. oil prices, which have once again surpassed $100 per barrel, has contributed to gasoline prices reaching multi-month highs. On Monday, West Texas Intermediate crude futures increased by 3.5% to more than $103 per barrel [1]. The rise in oil prices is attributed in part to heightened tensions between the U.S. and Iran, which have raised concerns about the security of the Strait of Hormuz—a vital route for global oil shipments—and have further fueled commodity price increases [1].
Prediction market contracts on Kalshi are settled using AAA's national average gas price data, and traders are also split on whether gas prices will remain elevated through the U.S. presidential election. There is a 50-50 chance that gas prices will be above $4.25 per gallon on election day, November 3 [1].
The market's expectations for sustained high gas prices reflect both the current geopolitical risks and the ongoing strength in oil prices, suggesting that consumers may continue to face elevated costs at the pump throughout the year [1].
CONCLUSION
Prediction market traders are signaling a strong likelihood of U.S. gas prices reaching new highs in 2026, with significant probabilities assigned to prices exceeding $4.60 and even $5.00 per gallon. The combination of rising oil prices and geopolitical tensions is driving these expectations, indicating potential continued pressure on consumers and the broader market.