June 1 is a big date in the transportation energy industry. It marks the completion of the spring transition to summer blend fuels because it is the date at which retailers in non-attainment zones must fully switch to selling summer grade gas. This year, June 1 could be important for another reason: It could be when the fueling market is significantly different than it was in late April.
THE STATE OF FUELING
“For the last 40 years, the market has gamed out what would happen if the Strait of Hormuz closed,” said Denton Cinquegrana, chief oil analyst with OPIS during the 2026 NACS State of the Industry Summit in April. “We’re finding out now.”
Cinquegrana said that the conflict with Iran, even if it is quickly resolved, marks the beginning of a prolonged period of elevated prices—what he repeatedly described as a “higher-for-longer” environment.
The closure of the strait, through which about 20% of the world’s oil passes, will have profound, and growing, effects on world oil supply and prices.
In addition to the reduced flow through the Strait of Hormuz, production and refining operations in the area have been reduced or shut down because of safety concerns related to drone attacks. Roughly 35% of the region’s refining capacity is offline, particularly affecting diesel and jet fuel supply.
And it could get worse. “The longer the conflict goes on, the more likely there will be damage to infrastructure,” said Cinquegrana.
SUPPLY INCREASINGLY A CONCERN
The end result of the ongoing turmoil is that a projected global surplus for oil and refined products has turned into a global deficit—and there aren’t many options to fill in supply gaps.
“How do you destroy 10.5 million barrels a day of demand?” Cinquegrana asked—that amount equates to about 10% of overall world demand.
Asian and European countries, which are more dependent upon the strait for refined product than the United States, already are feeling the supply crunch. In parts of Asia, governments are encouraging four-day workweeks and work-from home policies. Pakistan has implemented rolling blackouts to conserve fuel.
One reason the United States is better positioned than Europe or Asia is domestic production, which has climbed to nearly 14 million barrels per day. Additionally, the U.S. imports 3-4 million barrels per day from Canada.
“The U.S. has put itself in a position where it doesn’t need as much Middle Eastern oil,” Cinquegrana said. However, in a global market, supply shortages anywhere are felt around the world as prices increase.
SUPPLY ISSUES COULD HIT THE U.S.
“We don’t have a supply problem—we have a price problem,” Cinquegrana said. But that could change this summer and if it does, it will start in California. Long before the present crisis, the state had been shedding conventional refining capacity. Two major refineries have closed, while others have been converted to renewable diesel facilities.
“California just doesn’t have the refining depth it used to,” he said. The state has become increasingly reliant on imported fuel—from Asia, India, South Korea and even storage hubs in the Bahamas.
But that dependence is risky. Many exporting countries are now restricting exports to protect their own domestic supply: China has suspended exports; South Korea and India are prioritizing domestic demand.
Pipeline reversals and new infrastructure could help, but not overnight. “This isn’t flipping a switch,” Cinquegrana cautioned. Real relief may not arrive until late 2026 or beyond.
On a national level, the U.S. government has taken some steps to address the market, including temporarily waiving the Jones Act to allow foreign-flagged ships to move fuel between U.S. ports. But soaring global shipping rates have negated much of the price benefits.
Even once the conflict ends, Cinquegrana estimates that it will require at least 12 weeks of normalizing the region to stabilize supply, and that many countries will increase oil demand through 2027 to rebuild inventories.
That means that prices are unlikely to retreat to pre-war norms. “The price of oil is going to stay elevated,” he said. “You need to motivate producers to bring supply back—and you’ve got countries refilling storage on top of that.”
“You can kiss $2.96 gas [the price before the conflict] goodbye for 2026, and probably the start of 2027,” he said.
THE STATE OF CHARGING
“Internal combustion engine (ICE) vehicles aren’t going anywhere. Electric vehicles aren’t going anywhere. There are opportunities in charging, but don’t give up on the fuel island,” said John Eichberger, executive director of the Transportation Energy Institute (TEI), during his presentation at the 2026 NACS State of the Industry Summit. “If you ignore the reality of where this is headed, you will be left behind.
“If you are making strategic business decisions based upon the headlines, I guarantee you’re going to be disappointed,” said Eichberger. Instead, he told attendees to focus on data.
VEHICLE SALES ARE EVOLVING … SLOWLY
In the first quarter of the year, electric vehicles (EVs) accounted for about 6% of U.S. vehicle sales, while roughly 94% of vehicles sold still relied on combustion engines, including hybrids that require liquid fuels.
Sales figures, Eichberger stressed, are often confused with vehicles in operation—an error that leads to inflated conclusions about fuel demand.
Overall, EVs represent only about 2% of registered vehicles, with at least one-third of all EVs in California. “Your business depends on what vehicles people are driving, not what they’re buying,” he said.
Over the past 13 years, approximately 97% of vehicles sold have included a combustion engine. Given average vehicle lifespans are 12 to 15 years—and even longer for diesel trucks—ICE vehicles will dominate for decades.
Affordability, so far the word of the year in economics and politics, plays an outsized role related to vehicle sales … and the transition to EVs. With the average new vehicle price approaching $51,000 and monthly payments nearing $800, fewer Americans can afford new cars. That has led to drivers holding onto vehicles longer and further slowing fleet turnover.
While EVs get headlines, hybrids that don’t require charging and operate like traditional ICE vehicles are having a profound impact on fuel sales. Around 13% of vehicle sales are hybrid electric vehicles, many of which achieve fuel economy above 50 miles per gallon.
“Hybrids don’t change customer behavior, and they still generate fuel demand, despite increased efficiency,” Eichberger noted, pointing to models like the Toyota Camry that are now offered exclusively as hybrids.
For fuel retailers, that creates a new dynamic: Gallons per visit may decline, but trips may not because these more efficient vehicles often have smaller tanks, requiring more frequent fueling stops even as miles per gallon rise.
EV MANDATES ARE ALSO EVOLVING
Some aggressive zero-emission vehicle (ZEV) mandates are evolving. You can see the shifting priorities reflected in legal challenges to California’s zero-emission vehicle rules, Canada’s suspension of its 2035 ZEV mandate and Europe’s reconsideration of outright ICE bans.
“It’s not that leaders don’t care about emissions. They care more about availability, supply and affordability,” Eichberger said.
Energy security concerns—highlighted by Europe’s response to the loss of Russian natural gas—have forced policymakers to balance climate goals with basic economic realities.
“We must reduce carbon emissions ‘at all costs’ is an easy thing to say if you’ve never struggled to pay a bill,” Eichberger said.
SOME CHARGING OPPORTUNITIES
EV charging presents opportunities, but Eichberger cautioned against unrealistic expectations. Installation costs can be considerable, grant funding is dwindling and electricity rate structures are still poorly suited for retail charging. “Selling electrons is really difficult to make money on,” Eichberger said.
Still, TEI data drawn from more than 70,000 DC fast-charging ports suggests demand continues to grow. Utilization has remained steady even as charging inventory expanded by more than 50%, signaling unmet demand in many markets.
As used EV inventory rises—driven by more than a million vehicles coming off lease over the next two years—public charging demand may shift. Lower-income and apartment-dwelling buyers, less likely to have home charging, will rely more heavily on public infrastructure.
“This is where your local market really matters,” Eichberger advised. Looking ahead, Eichberger sees technology—especially AI-driven search and invehicle systems—reshaping how customers choose where to stop.
“The customer of the future is going to ask their phone or their car where to refuel or recharge, and if you’re not part of that system, you’re going to be missed,” he warned, noting that retailers have multiple options to be found, including THRIVR, the digital marketing platform developed by NACS.
