Gasoline Slides on Iran Ceasefire Hopes

US gasoline futures slid over 5% to around $2.9 per gallon on Wednesday, reversing gains from the previous session, as prospects of a potential ceasefire in the Middle East raised expectations of easing disruptions to global oil supply. President Donald Trump said the US and Iran are currently in negotiations, despite Tehran denying any direct talks. Reports also indicated that Washington had sent Iran a 15-point plan to end the war. Energy markets have remained volatile since the conflict began, with gasoline still up more than 30% so far this month after recently reaching its highest level since July 2022, driven by supply disruptions in the Strait and the seasonal shift to costlier summer fuel blends. Meanwhile, the Trump administration is reportedly planning to expand summer sales of higher-ethanol E15 gasoline by waiving US volatility requirements.

US gasoline futures rose more than 3% to around $3.10 per gallon on Tuesday, trimming the previous session’s slump as crude prices climbed after an Iranian lawmaker dismissed prospects for talks with the US. Ali Nikzad, Iran’s deputy parliament speaker, said the Strait of Hormuz would not return to normal and ruled out negotiations with Washington, after Donald Trump on Monday delayed a threatened strike on Iran’s energy infrastructure for five days, citing ongoing talks. At the same time, Israel continued its attacks, while reports indicated that US allies in the Gulf are moving closer to joining the conflict, with Mohammed bin Salman nearing a decision to participate in the strikes. Gasoline futures are now up more than 30% this month, after recently hitting their highest level since July 2022, supported by supply disruptions in the Strait and the seasonal shift to more expensive summer fuel blends.

US gasoline futures fell more than 10% to around $2.91 per gallon on Monday from $3.286 in the previous session after President Donald Trump paused plans to strike Iranian energy infrastructure for five days following what he described as productive talks, triggering a sharp drop in oil prices. However, Iranian media denied any contact with Washington. Brent crude briefly dipped below $100 per barrel as oil slumped more than 11%. Despite the pullback, gasoline futures remain up over 27% this month, recently hitting their highest level since July 2022 at $3.2862, supported by strong spring demand and earlier gains in crude amid the conflict. Supply disruptions linked to the near halt in traffic through the Strait, along with seasonal shifts to costlier summer fuel blends, continue to underpin prices.