Gasoline Futures Drop 10%

Gasoline futures shed over 10% below $3 per gallon on Wednesday, hitting an almost four-week low, following Iran’s agreement to temporarily reopen the Strait of Hormuz as part of a two-week ceasefire with the US and Israel. Iranian Foreign Minister Abbas Araghchi said the passage would be managed in coordination with the nation’s armed forces, while considering technical limitations. President Donald Trump had previously stressed that the ceasefire hinged on Iran reopening the waterway, a step necessary to finalize the deal. Reports also indicated that Israel will suspend strikes during ongoing talks, with the first round of US-Iran negotiations scheduled for Friday in Islamabad. The announcement came just under two hours before Trump’s deadline for Iran to reopen the strategic strait or face targeted strikes on its power plants and bridges.

Gasoline decreased 5.37% to 3.1307 USD/Gal

Gasoline futures traded around $3.30 per gallon on Tuesday, near their highest level since July 2022, as investors balanced President Trump’s deadline for Iran against last-minute ceasefire efforts. Trump warned he would strike Iran’s energy and transport infrastructure within 24 hours if the Strait of Hormuz is not reopened. This overshadowed reports of a 45-day ceasefire proposal, put forward by mediators in US-Iran talks as a near-deadline attempt to ease tensions. Iran rejected the temporary truce, opting instead for a permanent settlement and submitting its own conditions through mediators. Trump also dismissed the plan as “not good enough,” but acknowledged it as a significant step. Separately, OPEC+ agreed to increase output by 206,000 bpd in May, although disruptions from the Strait’s closure and damaged infrastructure could limit how much supply reaches global markets.