Gasoline Drops to 1-Month Low

US gasoline future were at $3.15 per gallon in late May, their lowest in over one month, on expectations of respite in supply following reports that Iran and the US agreed to a truce in their conflict. The reports pointed to a 60-day memorandum that would extend the current ceasefire and pave the way to restore exports of crude oil and refined products through the Strait of Hormuz within a month of the 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 15th consecutive week in May, as refineries have been operating at full capacity with feedstock from the SPR. Refinery capacity was also lower for motor gasoline as refiners switched to distillates in an attempt to prevent diesel and jet fuel shortages.

Gasoline decreased 16.75% to 2.6088 USD/Gal

US gasoline futures rose above $3.20 per gallon, attempting to rebound from a five-week low, as fresh strikes in the Persian Gulf clouded prospects of a US–Iran deal that could reopen the Strait of Hormuz. Both sides reportedly launched new strikes, raising doubts over the viability of a concrete agreement amid ongoing talks, with Washington and Tehran remaining divided over key negotiating issues. Adding to tensions, the US Treasury sanctioned Iran’s Persian Gulf Strait Authority over an alleged IRGC-linked toll scheme in the strait. The back-and-forth developments since the conflict broke out in March have kept energy markets volatile, pushing gasoline futures to a four-year high in early May. Meanwhile, industry data showed US gasoline inventories fell by 3.2 million barrels in the week ending May 22. Separately, Russia is reportedly weighing restrictions on diesel and jet fuel exports as refinery operations come under pressure from escalating Ukrainian attacks.