Gasoline Prices Climb to 3½-Year High

US gasoline futures climbed above $3.30 per gallon, hitting their highest level since July 2022, as the Middle East war continued to escalate. Prices are also on track for their biggest monthly gain on record of over 30%, following severe disruptions to energy flows after the near-complete closure of the Strait of Hormuz. In the latest development, Iran-backed Houthi fighters in Yemen have joined the broader conflict and said their operations would persist until attacks against Iran and its allied militant groups come to an end. Houthi involvement adds new risks to crude markets, as Red Sea disruptions and potential threats to Yanbu shipments could further tighten supply. Meanwhile, additional US forces have been deployed to the region, fanning fears of a potential ground invasion. These developments have extended the war into a fifth week and dimmed prospects for a near-term resolution.

US gasoline futures rose above $3.20 per gallon amid continued volatility, as markets tracked ongoing developments in the Middle East crisis. Prices have swung throughout the month and are up more than 30% so far, putting them on track for their biggest monthly gain since May 2020, driven by severe disruptions to energy flows following the near-complete closure of the Strait of Hormuz. Meanwhile, President Donald Trump said he would postpone action on Iran’s energy sector, moving the deadline to April 6. Analysts said the extended ceasefire eases short-term pressure, but with 8 million barrels per day offline and Persian Gulf flows still at risk, the geopolitical premium is likely to remain significant. Seasonal demand pressures are also rising as spring travel picks up and refineries switch to costlier summer fuel blends. Earlier this week, EIA data showed US gasoline inventories fell by 2.6 million barrels, exceeding expectations of a 2.1 million-barrel draw.

US gasoline futures rose above $3.0 per gallon, trimming losses from the previous session, as markets weighed mixed signals from the US and Iran on ending the conflict. Iran said it has no plans for direct talks with the US, noting that mediated exchanges do not amount to negotiations. This differs from the White House, which insists that peace talks are ongoing, while also warning that the US could escalate military action if Iran refuses to acknowledge its losses. Energy markets have been volatile since the conflict began, with gasoline prices still up over 30% this month due to supply disruptions in the Strait and seasonal demand factors. Meanwhile, EIA data showed US gasoline inventories fell by 2.6 million barrels last week, exceeding expectations of a 2.1 million-barrel draw. Elsewhere, the US is planning to expand summer sales of higher-ethanol E15 gasoline by waiving volatility requirements.