Kalshi is giving a 71% chance that the national average price of gas finishes August above $4.00 per gallon.
The interesting part is that gas is already there.
AAA’s national average currently sits around $4.01, meaning the market is effectively saying there is still a 29% chance prices fall back below $4.00 before the contract settles at the end of the month.
Sign up today with Kalshi promo codeACTION to get started with a $15 bonus.
US Gas Prices This Month at Kalshi
Here’s the current Kalshi ladder:
- Above $4.00: 71%
- Above $4.10: 57%
- Above $4.20: 42%
So the lowest strike is basically sitting right on top of the current pump price.
And compared with where this market was a month ago, the pricing looks even more interesting. On July 16, gas was only around $3.89, yet Kalshi priced the chance of finishing August above $4.00 at 91%. Today gas is higher, $4.01, but the odds are 20 points lower.
Why?
Mostly because traders are pricing in the possibility of a deal that reopens the Strait of Hormuz and takes some of the geopolitical premium out of oil. That expectation has driven some huge swings in this market.
Just within the past week, the $4.00 contract has risen 37 percentage points, while $4.10 is up 17 points and $4.20 is up 14.
Kalshi’s broader forecast has moved the same way. Expectations climbed toward roughly $4.33 in late July, collapsed toward $3.87 during the first week of August, and have since worked their way back to around $4.15.
In other words, traders have gone from pricing a major decline in gas prices to realizing that the decline may not happen nearly as quickly as expected.
There is one thing worth noting about the odds, though: the market is relatively thin.
The $4.10 contract, for example, shows roughly a 57% implied probability, but Yes is offered around 61¢ while No is around 43¢. All three major strikes have roughly four-cent spreads.
Still, nearly $380,000 has traded across the market.
The real driver: Hormuz.
At the moment, this is less a gas-price market than it is a bet on negotiations surrounding the Strait of Hormuz.
Last week, Brent and WTI crude both fell roughly 7% after reports suggested the two sides were moving closer to an agreement that could reopen the strait.
Gas prices reacted quickly.
AAA’s national average fell about nine cents in a week, from roughly $4.09 to $4.00. But the negotiations haven't been straightforward. Iran later attached conditions to an agreement, including an end to sanctions and military threats as well as compensation. Oil bounced on the news, with Brent rising 3.3% on August 10 to about $84.64 and WTI reaching $80.63.
Then sentiment flipped again on August 11 after Pakistan’s defense minister suggested the sides were nearing an arrangement and Qatar described Iran-Oman discussions about restoring maritime traffic as advanced.
That back-and-forth is important because of how dramatically gasoline has already reacted.
The national average fell nine cents largely on expectations of a deal, before a final agreement was signed and before normal tanker traffic resumed.
That gives us a rough idea of what could happen if an actual reopening is announced. But there’s another problem for gas bears: the lag.
Gasoline prices don’t immediately follow crude oil. Changes in crude typically take some time to work through refineries, wholesalers and eventually gas stations. That means the recent rebound in oil prices may not be fully reflected at the pump yet.
GasBuddy’s Patrick De Haan has also warned that the national average could reach its highest level ever recorded for this point in the calendar year.
And August is important because it may be the final clean window for elevated prices.
After Labor Day, driving demand normally begins to decline and refiners start transitioning toward cheaper winter-blend gasoline. That is one reason the annual peak in gasoline prices is often established by early September.
For context, the 2026 national high was $4.564 on May 21, and current prices are still roughly 87 cents higher than a year ago.
You have gas already sitting above $4.00, crude prices that may still be working their way through to consumers, and a geopolitical negotiation capable of moving the entire curve with a single headline. The August gas market is essentially a Hormuz settlement trade.
The Trade
Of the three main contracts, Above $4.00 looks the most attractive at 71¢.
Gas is already around $4.01, so unlike the higher strikes, you don’t need another major move upward. You mostly need prices to hold somewhere close to current levels through the end of August.
The $4.10 contract requires roughly another 10 cents of upside while trading around 61¢, making the risk/reward less compelling.
The $4.20 contract offers a much larger payout around 41¢, but it likely requires continued strength in crude and probably no meaningful Hormuz reopening before month-end.
The obvious risk to all three is the same.
If a credible agreement to reopen the Strait of Hormuz is announced, oil could sell off sharply and gasoline could quickly fall back below $4.00. We already saw something close to that happen last week based mostly on optimism that a deal was coming.
For now, though, $4.00 Yes is essentially a bet that the current price can survive the next three weeks.
