Every driver has a private economic indicator. It’s the number on the sign at the corner station, and it updates faster than any government report.
The numbers have been stubborn this year. The national average price for regular gasoline on Monday, Oct. 12, was $4.36 per gallon, according to AAA. A year ago, drivers paid about $3.12.
You should pay less now. ABC 6 cited GasBuddy’s January outlook, which predicts the national average gas price will be $2.97 per gallon in 2026, falling to $2.83 in December.
Subsequently, the war between the United States and Israel broke out on February 28, and oil tanker traffic in the Strait of Hormuz was disrupted. This optimistic prediction turned into a historical miracle almost overnight.
So every time falling crude prices make headlines in Washington, Moscow, or Tehran, you have a question that futures traders can’t answer for you: Is any crude reaching your tanks?
On Monday, October 12, oil dominated the headlines. Crude oil prices fell on hopes of securing more supplies after President Donald Trump announced that Russia and Ukraine had agreed to stop attacking each other’s energy facilities.
Why oil prices fell after presidential energy ceasefire
According to CNBC, Brent crude oil for December delivery fell 0.77% to $103.91 a barrel, while U.S. West Texas Intermediate crude oil (WTI) for November delivery fell 1.26% to $90.69 a barrel.
“The war between Russia and Ukraine has reached an energy ceasefire, effective immediately. Both sides have agreed. Don’t break it!” Trump wrote in a social media post on Sunday, October 11, according to CNBC.
RELATED: Energy minister warns diesel ban will raise gas prices
Kyiv also joined in this time. “Ukraine supports the ceasefire and it is important that Russia also supports the ceasefire,” Ukrainian President Volodymyr Zelensky said in his own post, CNBC reported.
The truce follows the announcement on Friday, October 9, that Moscow will supply more than 4 million tons of diesel fuel to the global market under an agreement reached between President Trump and Russian President Vladimir Putin.
NurPhoto/Getty Images
Russia’s diesel crunch is more important for your budget than crude oil
According to the Kyiv Post, Ukrainian drone operations destroyed so much of Russia’s oil refining capacity that Moscow banned almost all diesel exports starting in July. Energy analytics firm Vortexa told Bloomberg that Russia is the world’s second-largest diesel exporter.
More gas prices:
- Motorists and truckers get no relief from lower oil prices
- Diesel, petrol prices rise in September: What now?
- 16 trucking companies filed for bankruptcy in 30 days
The White House has placed direct blame for the problem. “The rise in world diesel prices is caused primarily by the Russia/Ukraine war, not the Iran war,” the president wrote in The Truth Society in September, according to the National News Channel.
Even if you drive a gasoline car, diesel is your problem. It delivers your groceries, your packages and the trucks that restock the gas stations themselves, which refineries can’t do without producing gasoline, as I explained when the energy secretary warned that a diesel ban would raise gasoline prices.
September’s truce comes just days before truck stop record-breaking
When I look back at my own oil reports, this strikes me. This is the second energy truce announced by President Trump in four weeks.
Against the price data, the timetable reads like a warning:
- September 14According to Bloomberg, Trump said both sides agreed to stop meeting energy targets, but Zelensky said Ukraine “doesn’t believe Russia is willing to abide by any agreement.”
- September 22: The national average price of diesel fuel hit a record $6.53 per gallon, according to AAA.
- September: The average price of diesel this month was $6.29, a record high, according to the Bureau of Transportation Statistics.
- October 9: According to CNBC, the president announced a Russian diesel supply agreement.
- October 11: According to CNBC, the White House announced an energy ceasefire “effective immediately.”
Eight days after the first break, Diesel set a record. Analysts pointed to a credibility gap at the time.
“To me, what I hear from Ukraine and Russia is more certain than what I hear from Trump,” Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, told Bloomberg in September.
This version is stronger on paper because Zelensky publicly supports it. However, I found no public support from the Kremlin in the CNBC report.
What a cheaper barrel of oil means for gas stations
One barrel holds 42 gallons. Therefore, before refining, transportation, gas station profits and taxes, every $1 increase in crude oil prices is equivalent to approximately 2.4 cents per gallon.
I calculated Monday’s data using this formula. Brent crude oil costs about 81 cents a barrel, or less than 2 cents a gallon, a number too small to show on most signs.
Russia is not a factor in determining gasoline prices. According to CNBC, Singapore’s United Overseas Bank (UOB) said in a report on October 12 that this is still the Middle East, and the Houthi armed missile attacks on Saudi Arabia “significantly increased the Middle East risk premium.”
Hurricane Isaias caused a short-term impact by shutting down production in the Gulf of Mexico. “I would expect that the oil production that was shut down could be restored very quickly in just a few days,” Patrick De Haan, director of oil analysis at GasBuddy, told Gray News.
Now comes the part that should change the way you budget. According to my analysis, the difference between today’s $4.36 and GasBuddy’s $2.97 forecast is $1.39 per gallon, or about $21 per 15-gallon fill.
Filling it up every week works out to about $1,080 a year. GasBuddy projects that the average household will spend $2,083 on natural gas in 2026, and at Oct. 12 prices, those 700 gallons or so would cost about $3,055.
Where you live widens the gap. According to AAA, regular gasoline sells for $6.31 in California and $3.81 in Georgia, a difference of $2.50 per gallon.
How to read the next gas price headline
Let’s look at diesel first. The truce targets diesel supplies, so if the truce lasts into the next few weeks, diesel prices should show up before gasoline prices.
A gasoline rescue requires bigger efforts: calmer shipping in the Strait of Hormuz and a cooling off of the Iran conflict. Until then, budget based on the price on the sign (not the forecast) and keep comparing stations, because the $2.50 difference across the state means there’s a gap between neighborhoods, too.
The ceasefire posted online is a promise. Cheaper gas is proof of that, and only one of them pays for groceries.
RELATED: Bessant issues warning to anyone helping Iran sell oil