Highlights

Traders on prediction market Kalshi now see a greater chance that U.S. pump prices will remain elevated after a fresh round of strikes between the U.S. and Iran disrupted expectations for shipping through the Strait of Hormuz. Kalshi places a 75% probability that gas prices will exceed $3.50 per gallon on Election Day, Nov. 3, and gives a 39% chance prices will be above $3.75 — both higher than odds before the latest Middle East developments. The platform resolves its contracts using AAA's national average gas-price data.

Sentiment Analysis

• The overall sentiment is mixed-to-cautiously negative, reflecting concerns that renewed U.S.-Iran hostilities and uncertainty around traffic in the Strait of Hormuz could keep fuel prices elevated. Market participants have increased the probabilities of higher price thresholds for the coming months, signaling shorter-term downside risks have diminished.


• Kalshi traders now place a 75% chance of prices above $3.50 on Nov. 3 and 39% for above $3.75, up from roughly 37% and 22% before the escalation. This represents a material upward revision of expectations.


• At the same time, traders are not forecasting a return to extreme highs: the market assigns only a 43% chance that average gas prices will top $4.60 this year, up from about one-in-three prior to the renewed conflict.

Article Text

Renewed exchanges of strikes between the United States and Iran have altered market expectations for gasoline prices, according to traders using the Kalshi prediction market. With the prospect of normalized shipping through the Strait of Hormuz now less certain, participants have raised the odds that U.S. pump prices will remain higher for a longer period. Kalshi’s contracts are settled using the AAA national average of gas prices, a commonly cited benchmark.

On Kalshi, traders currently assign a 75% probability that the national average gasoline price will exceed $3.50 per gallon on Election Day, Nov. 3, and place a 39% probability on prices surpassing $3.75. Those probabilities were markedly lower before the recent escalation in Middle East hostilities — roughly 37% and 22%, respectively — indicating traders have materially increased their expectations for elevated fuel costs.

Actual price data supports part of that concern. AAA reported a national average of $3.84 per gallon on Thursday, a rise of five cents from the previous day. U.S. crude prices also reacted, with West Texas Intermediate (WTI) crude briefly trading as high as $75 per barrel on Wednesday, up from about $68 on Monday, before easing to just under $72 on Thursday.

Despite higher near-term odds, market participants do not appear to be forecasting a full return to the highs seen earlier this year. Kalshi’s market-implied chance that average gasoline prices will exceed $4.60 at any point this year stands at 43%, an increase from roughly one-in-three before the renewed U.S.–Iran clashes, but still indicating a less than certain path to new peaks. For context, the high for U.S. average gas prices in 2026 occurred on May 21, when the national average reached $4.56 per gallon.

It’s worth noting the pre-conflict backdrop: prior to the escalation of tensions, the national average price of gasoline in the United States had fallen below $3 per gallon. The shift in trader expectations reflects heightened geopolitical risk and the potential for supply disruptions or shipping bottlenecks that could keep prices elevated even if longer-term fundamentals temper runaway increases.

In sum, prediction-market pricing has adjusted upward following renewed hostilities, signaling that traders see a higher likelihood of sustained, though not necessarily record-breaking, gasoline prices in the months ahead. These probabilities are driven by both geopolitical developments and near-term movements in crude oil benchmarks, and they are settled against a widely used industry gauge, AAA’s national average of gas prices.

Key Insights Table