Gasoline Hits Almost 4-Year High

Gasoline futures for delivery in New York Harbor rose toward $4.50 per gallon in late April, hitting their highest level since July 2022, as ongoing Middle East supply disruptions reduced crude availability for refiners. Although a ceasefire has mostly been held since early April, attempts to restart peace negotiations in the Iran conflict have failed. A US-led blockade continues to enforce restrictions on Iranian maritime traffic, while Iran has also tightened its control over the Strait of Hormuz, with recent reports pointing to gunfire incidents involving commercial vessels in the area. As a result, shipping flows through the passageway have fallen to near zero, disrupting a key corridor that normally moves about 20 million barrels per day of oil and refined products. The US blockade of Iranian crude has extended supply pressures to Chinese teapot refiners, which had largely avoided disruption until mid-April due to their heavy reliance on Iranian feedstock.

Gasoline increased 5% to 3.3704 USD/Gal

Gasoline futures for delivery on the New York Harbor rose to above $3.40 per gallon in April, the highest in nearly four years, as the prolonged conflict in the Middle East worsened the supply shortage of oil for refiners. Iran struck and then seized multiple commercial vessels near the Strait of Hormuz shortly after US President Trump announced the continuation of the blockade for the chokepoint until a deal is reached. The developments were the latest to align with the likelihood that tanker movement through the Strait will remain halted for the near future, preventing exports from the region that usually supplies 20 million barrels per day of oil and refined product. The US blockade of Iranian crude spread the supply stress to Chinese teapot refiners, which were spared of the conflict until mid-April due to their large reliance on Iranian feedstock. Consistently, gasoline stocks in the US sank by 4.6 million barrels on the week ending April 17th, a 10th straight draw.