The U.S. Environmental Protection Agency (EPA), in consultation with the Department of Energy (DOE), is expanding gasoline supply to lower prices at the pump. The agency issued waivers allowing the sale of E10 gasoline starting September 1.

Waiver details and timeline

The EPA's waivers permit the sale of E10, gasoline blended with 10% ethanol, as part of a supply expansion effort. The actions are set to remain in place through the end of the summer control season on September 15, 2026.

Context and scope

The EPA's stated objective for the waivers is expanding gasoline supply with the aim of lowering prices at the pump. The measures cover the duration of the summer control season, which concludes on September 15, 2026.

U.S. gasoline prices have crossed a threshold never seen this late in the year, reaching $4.0360 per gallon on Wednesday, according to data from the American Automobile Association (AAA). This marks a daily increase from Tuesday’s average of $4.0116 per gallon, driven by ongoing volatility in global energy markets linked to tensions with Iran.

Unprecedented Late-Year Pricing

Patrick De Haan, an analyst at GasBuddy, highlighted the historical anomaly in a post on X. He stated that the national average price is at its "highest ever level this late in the calendar year." Specifically, De Haan noted that the national average has never been above $4/gal after August 12 in any previous year.

The persistent elevation of prices reflects broader market instability. While the national average remains anchored around the $4 mark, the specific breach of this psychological barrier so late in the year underscores the impact of geopolitical friction on consumer fuel costs.

Geopolitical Tensions and Crude Markets

Tensions over the Strait of Hormuz continue to roil energy markets. Iran’s newly appointed Secretary of the Supreme National Security Council, Mohsen Rezaei, stated that the strait will remain closed until the U.S. meets Tehran’s demands, including a ceasefire in Lebanon and Gaza. This stance directly contradicts claims by President Donald Trump, who reaffirmed that the U.S. was in control of the waterway. Iran’s Persian Gulf Strait Authority (PGSA) refuted Trump’s claims, maintaining that the waterway was blocked.

Despite these tensions, crude oil prices experienced a slight decline during overnight trading on Wednesday:

The United States Oil Fund (NYSE: USO), an ETF tracking crude oil prices, fell 0.49% to $126.67.

What the Numbers Show

The divergence between the slight dip in crude benchmark prices and the record-high late-year retail gasoline prices suggests a lag in transmission or persistent supply-side premiums embedded in refined product costs. While WTI and Brent retreated to the low-$80s and high-$80s respectively, the consumer-facing metric (gasoline) hit a historic high for the period, indicating that geopolitical risk premiums are being fully passed through to end-users despite minor corrections in raw crude valuations.