Gasoline Hovers Near 3½-Year Highs

US gasoline futures eased to around $3.20 per gallon on Monday, as traders balanced reports of renewed Middle East ceasefire efforts against a fresh ultimatum from President Donald Trump on Iran. The US, Iran, and regional mediators were said to be discussing a potential 45-day truce, though prospects for even a partial deal within the next 48 hours remained slim. Simultaneously, Iran said Iraq would be exempt from Strait restrictions, potentially supporting oil flows, with SOMO confirming that Iraqi cargoes can be loaded without limits. Meanwhile, President Trump warned on social media of severe consequences if Iran fails to reopen the passage by Tuesday, including possible strikes on key infrastructure such as power plants and bridges. Elsewhere, OPEC+ agreed to raise output by 206,000 bpd in May, although closed Strait routes and damaged infrastructure may constrain how much supply reaches global markets.

US gasoline futures dipped to around $3.20 per gallon on Monday but remained near their highest level since July 2022, after President Donald Trump intensified pressure on Tehran. He warned via social media that Iran could face significant repercussions, including strikes on critical infrastructure such as power plants and bridges, if the Strait of Hormuz remains closed. His remarks follow last week’s national address, in which he suggested the conflict might continue for another two to three weeks. Meanwhile, OPEC+ announced plans to boost output by 206,000 barrels per day in May, though questions remain about how the additional supply will reach global markets while the Strait is blocked. The group also cautioned that repairing infrastructure damaged by Iranian attacks is both costly and slow, likely keeping overall supply constrained.

US gasoline futures surged over 6% above $3.28 per gallon, ending a two-day decline and following gains in crude prices, after President Trump signaled that the US could take military action against Iran in the coming weeks. In his rare prime-time address, Trump offered no timeline for resolving the Middle East conflict, saying the US had nearly achieved its strategic objectives in Iran but warning that military operations could intensify over the next two to three weeks. The statement elevated the risk of more widespread damage to energy infrastructure throughout the Gulf region. Meanwhile, Iran rejected Trump’s claim that it had sought a ceasefire, asserting that the Strait of Hormuz would remain closed and that the vital transit route is firmly under IRGC Navy control. Elsewhere, US gasoline inventories fell by 0.6 million barrels last week, compared with analysts’ expectations for a 1.9 million-barrel draw.