US Gasoline Futures Fall Toward 4-1/2-Year Low

US gasoline futures slid toward $3.10 per gallon on Wednesday, extending losses from the previous session, weighed by signs of de-escalation in the Middle East conflict. President Trump said the US could withdraw from Iran within two to three weeks and suggested a formal deal with Tehran is not required for the conflict to end. Markets remained cautious, however, as he oscillated between signaling a near-term agreement and warning of potential escalation. At the same time, additional US troops arrived in the region, and Tehran said no peace talks were underway but indicated it is ready to end the war if its conditions are met. Meanwhile, gasoline posted a historic 30% monthly surge in March, driven by a broader supply shock from disruptions in the Strait of Hormuz, through which roughly 20% of global oil flows have been nearly halted since the war began.

US gasoline futures retreated past $3.2 per gallon on Tuesday as a historic 30% monthly surge cooled following a significant diplomatic opening from Tehran. The price retreat was triggered by Iranian President Masoud Pezeshkian expressing a readiness to end regional hostilities provided that Western powers offer essential guarantees and reparations. This shift in rhetoric matches recent attempts by President Trump to de-escalate the conflict and potentially restore tanker traffic through the Strait of Hormuz where roughly 20% of global oil flows have remained disrupted throughout March. While the prospect of restored supply pressured energy benchmarks the modest nature of the decline reflects deep market skepticism fueled by the recent damage to the Al-Salmi tanker and the continued movement of US troops to the Middle East. Despite the daily dip gasoline remains on track for its largest monthly gain on record amid the broader supply shock from the nearly total closure of key corridors.

US gasoline futures hovered around $3.20 per gallon, heading for their strongest monthly gain on record of more than 30%, moving in line with crude as disruptions continue to affect roughly one-fifth of global oil transit. The supply shock is largely driven by the near shutdown of the Strait of Hormuz, compounded by Houthi threats in the Red Sea that increase the risk of disruptions along another critical maritime route. These pressures threaten to further tighten energy flows from the Middle East, with two of the world’s most vital trade arteries under strain. Although reports of possible negotiations emerged during the month, including recent indications that President Trump is willing to end the military campaign in Iran even if the Strait remains largely closed, markets remained cautious. Seasonal demand also provided support, as spring travel picks up and refineries switch to costlier summer fuel blends.