Gasoline Holds Near 4-Week High

Gasoline futures in the US were above $3.65 per gallon, near the four-year high of $3.75 touched May 4th as the continued tanker blockade in the Persian Gulf prolonged the suspension of oil and fuel supply from the region. The US and Iran remained in an impasse that extended their respective threats on commercial vessels flowing through the Strait of Hormuz. On top of that, US President Trump stated the current ceasefire has grown fragile, dimming the likelihood of an agreement. Energy exports from the key region have been at a standstill since the first week of March, driving global oil inventories to drop at a record pace, per the IEA. Likewise, gasoline stocks in the US sank for the 13th consecutive week in early May even though production inched higher, as refineries have been operating at full capacity with feedstock from the SPR.

Gasoline futures for delivery at the New York Harbor held above $3.50 per gallon, remaining near a four-year high, as the Middle East conflict continues without a clear resolution, sustaining disruptions to energy supply. US President Donald Trump dismissed Iran’s latest proposal to end the conflict, keeping the crucial Strait of Hormuz effectively closed. At the same time, Israeli Prime Minister Benjamin Netanyahu warned that the conflict with Iran was “not over,” heightening concerns over further military escalation. Shipping activity through the Strait of Hormuz has been halted since early March, disrupting the flow of nearly 20 million barrels per day of crude oil and refined products to major importing countries. Tightening diesel and jet fuel supplies in Europe and Asia have also led major refiners to prioritize distillate production over gasoline, further adding to concerns over fuel availability.

Gasoline futures for delivery at the New York Harbor traded around $3.50 per gallon, climbing back toward their four-year high, as fresh clashes in the Middle East heightened worries over prolonged energy supply disruptions. The US and Iran traded attacks in the Strait of Hormuz, with each side blaming the other for sparking the clash, raising doubts about the month-long ceasefire. Traffic through the Strait of Hormuz has remained suspended since early March, disrupting the flow of roughly 20 million barrels per day of oil and refined fuels to key importing nations. At the same time, shortages of diesel and jet fuel in Europe and Asia prompted major refiners to shift more capacity toward distillate production rather than gasoline, worsening supply concerns. As a result, US gasoline inventories fell for an 11th consecutive week, further tightening stockpiles ahead of the peak summer demand season.