Why does JPMorgan say the risk of $5 gasoline in the US can no longer be dismissed?

JPMorgan analysts state that the risk of $5 gasoline can no longer be dismissed because refiners are prioritizing jet-fuel production—driven by strong demand and price incentives—which diverts heavier hydrocarbons away from gasoline-producing 'crackers,' reducing gasoline yields by 2 percentage points; meanwhile, US gasoline prices are already at $4.55 a gallon, stockpiles are near decade-low seasonal levels, and the timing coincides with the start of the US driving season after Memorial Day.

According to JPMorgan, what is the emerging 'primary transmission channel for demand destruction' in the current energy crisis—and why?

According to JPMorgan analysts, fuel prices—not crude oil prices—may become the 'primary transmission channel for demand destruction' because refinery runs are constrained by limited crude supplies, causing sharper widening in refined product 'cracks' (margins); this means demand destruction will manifest first through high end-user fuel prices (e.g., jet fuel, diesel, gasoline) rather than through a classic crude oil price spike—even if crude stabilizes around $100 a barrel.

JPMorgan Warns Risk of $5 Gasoline Can No Longer Be Dismissed

May 8, 2026

JPMorgan analysts warn US gasoline prices could reach $5 per gallon as refiners prioritize jet fuel production amid Middle East tensions. Constrained refinery runs are expected to widen product cracks and reduce gasoline yields before the peak driving season.

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