Gas Prices by State Ease to $4.26 as Brent Crude Tops $110

The pump: a small dip from a high level

Prices at the pump have come down a little in the past week, but they are still very high for this time of year. AAA put the national average for regular unleaded at $4.26 a gallon on October 21. That is 7 cents lower than a week earlier, 21 cents lower than a month earlier and $1.24 higher than a year ago. The average has stayed above $4 since late July, and this is the first October on record with prices that high. August and September both set records for their months, and October is on track to do the same.

The weekly federal survey shows the same pattern. The Energy Information Administration (EIA) put regular gasoline at $4.284 for the week of October 19, down almost 5 cents from the week before.30 Diesel moved the other way. The EIA's diesel average rose nearly 10 cents in that week to $6.276.30 AAA's own diesel figure was about $6.32 on October 20.36

The starting point explains the frustration. When U.S.-Israeli strikes on Iran began on February 28, a gallon of regular cost just under $3 nationally. One assessment says getting back to prewar prices could take as long as a year.35

The state-by-state spread

The gap between states is wide. On October 21, AAA had California at about $6.11 a gallon. North Carolina was the cheapest state at about $3.57, followed by Georgia ($3.72), Texas ($3.76) and Indiana ($3.80). Most of the other expensive states are also in the West or off the mainland: Hawaii at about $5.63, Nevada at $5.37, Washington at $5.36 and Oregon at $4.92.

The rankings have shifted within the month. In the first week of October, Indiana was the cheapest state at roughly $3.72 to $3.75 and California was near $6.39.1417 By October 21, California had fallen almost 30 cents. North Carolina had taken the bottom spot, and Indiana and Ohio had moved up, with Ohio's EIA price rising about 18 cents in a single week.30 Prices did not move in step across regions, which points to local supply and refinery conditions rather than one national trend.

State taxes explain part of the gap but not all of it. California's fuel tax is about 73.6 cents a gallon. Indiana's is about 63.1 cents, yet Indiana is still among the cheapest states.14 Over the past year, the biggest jumps were often in states that started cheap. Oklahoma rose about 55% and New Mexico about 54% from October 2025. Washington and Oregon, which were already expensive, rose only about 21% to 22%.17 Nationally, gasoline is up about 39% from a year earlier and diesel about 72%.17

Crude oil: a war premium returns

The main reason prices are so high is crude oil. Brent rose back above $110 a barrel this week, its highest level since May 20.7 Early on October 21, Brent was near $110.30 and West Texas Intermediate (WTI), the U.S. benchmark, was just over $99.3 One quote put Brent at $112.85 on the morning of October 20, compared with about $61 a year earlier.8 WTI has gained more than 10% this month.7

Coverage agrees on the cause. Ship traffic through the Strait of Hormuz is unsafe again. Reuters, citing the analytics firm Kpler, counted at least 18 tanker attacks in two weeks.4 Houthi claims against Saudi facilities and attacks on oil infrastructure in the Russia–Ukraine war have added to the pressure.17

Coverage disagrees on how much oil is actually missing. One account cites Kpler data showing Persian Gulf outflows down to about 8.5 million barrels a day, from more than 20 million two weeks earlier.4 Another says Middle East flows are back to about 80% of prewar levels.7 ING analysts called flows "relatively strong" and said the market is pricing in a large risk premium.4 Other analysts say there is no confirmed large drop in Middle East supply, so today's prices mostly reflect fear of what could happen.9

The more convincing reading is that traders are paying for risk more than for oil that has actually stopped flowing. The EIA expects Brent to average about $105 in the fourth quarter. That suggests prices above $110 already include a war premium, which could shrink if shipping calms down or U.S.-Iran talks make progress.9 U.S. supply data, though, gives little reason to expect a fast drop. Commercial crude stocks fell 8.6 million barrels to 415.6 million in the week ending October 9.10 Analysts also cite strong domestic inventory draws and a hurricane last week as reasons WTI has been gaining on Brent.1

One number in the coverage is inconsistent: the price gap between Brent and WTI. One market strategist said it had narrowed from more than $12 to under $5 within two weeks.1 A market data page showed the gap at about $11 at the October 21 close.6 The difference partly reflects the November WTI contract expiring, which made trading thin and prices jumpy.1

Why diesel is the bigger problem

Gasoline and diesel are moving apart because of refinery economics. Saxo Bank's Ole Hansen, citing the International Energy Agency (IEA), said high crude and shipping costs have squeezed refiners in Europe and Asia. Diesel sells at very high prices, while gasoline profit margins have turned negative in some markets.1 If refiners cut output because of those margins, the diesel shortage could get worse.1 Headlines say the Trump administration is pressing refiners to make more diesel, and Morgan Stanley expects global fuel markets to stay tight through mid-2027.4

For drivers, this means gasoline has more room to keep falling than diesel does. Diesel feeds into freight and delivery costs, so a 72% yearly jump in diesel will reach shoppers through goods prices, not only at the pump.17

Natural gas: cheap at home, expensive abroad

Natural gas tells a very different story from oil. Henry Hub, the main U.S. natural gas price, fell to about $2.79 per million British thermal units (MMBtu) on October 21. That was a one-month low, down almost 6% in a day and about 19% from a year earlier, as mild weather cut demand.28 Overseas, Asian liquefied natural gas (LNG) prices have risen above $30 because of the same shipping risks pushing up oil.3

The U.S. gas market has been volatile this year, but it is not in a shortage. Winter Storm Fern pushed the Henry Hub spot price to a record $30.72 on January 23. Futures have since settled around $3.25 The EIA expects Henry Hub to average $3.48 for 2026 and $3.16 in 2027, as rising production keeps up with growing LNG exports.26 Futures point to only a small winter rise, with January 2027 near $3.76.25

Data centers: an electricity cost, not a pump cost

Power demand from data centers shows up in electricity bills, not at gas stations. Natural gas produces about 40% of U.S. electricity, and the EIA expects that share to hold.26 Power plants are expected to burn 37.0 billion cubic feet of gas a day in 2026, up from 35.8 billion. The EIA also expects electricity demand from the commercial sector, which includes data centers, to grow 2.8% in 2027.2520 Gas supplies more than 40% of the electricity used by U.S. data centers.22

The effect is real, but mostly regional. The EIA expects U.S. wholesale power to average $52 per megawatt-hour this year, 11% more than in 2025. It also expects prices in PJM, the largest grid operator in the eastern U.S., to rise 41%.26 In three PJM auctions, the price paid to guarantee future power supply rose from $28.92 to $333.44 per megawatt-day, largely because of data centers.27 One estimate puts the typical household on track to pay about $221 more for electricity this year than in 2024.19

Over the next few years, LNG exports are likely to add more gas demand than data centers. S&P Global expects data centers to add about 4 billion cubic feet a day of gas demand by 2030. It expects LNG exports to add more than 10 billion.23 Some analysts say demand is growing faster than production and see higher gas prices over three to five years.23

What to expect

The EIA expects gasoline to average just under $3.60 a gallon next year and diesel about $4.50, after September averages of $4.35 and $6.29.26 That forecast assumes shipping in the Gulf returns to normal. Given this month's tanker attacks, that assumption is the biggest risk in the outlook.

The practical takeaway: pump prices depend mostly on crude oil and the war premium, and the recent dip is fragile while Brent stays above $110. Natural gas is cheap in the U.S. and does not drive gasoline prices. The growth of data centers is showing up in electricity bills in grids like PJM rather than at gas stations.