Gasoline Prices Hold Gains

Gasoline futures in the US traded above $3.10 per gallon, holding a two-day gain, as renewed clashes in the Middle East undermined expectations for progress in US–Iran negotiations. Both sides reportedly exchanged fresh strikes, despite President Donald Trump stating that talks with Iran were still ongoing toward a possible peace deal, contradicting Iranian media reports that communications had broken down. The mix of conflicting signals and continued hostilities has kept markets uneasy, fueling heightened volatility across energy commodities. Supporting prices further, industry data showed that gasoline inventories rose by 3.5 million barrels in the final week of May after falling by 3.2 million barrels a week earlier, as refineries ran at elevated utilization levels, processing crude from strategic reserves, with some output capacity redirected toward diesel and jet fuel production to ease supply pressures.

Gasoline futures in the US held above $3.10 per gallon, after rebounding from a six-week low of $3.03 reached on May 29, following reports that Iran would suspend exchanges of messages with the US in response to Israel’s escalating operations in Lebanon. Earlier, Foreign Ministry spokesperson Esmail Baghaei said Iran remained engaged with the US but continued to do so with “distrust.” The development clouded prospects for an interim peace agreement, even as President Donald Trump said discussions with Tehran would “work out well” despite renewed clashes near the Strait of Hormuz. Supporting prices further, US gasoline inventories fell for a 15th consecutive week in May as refineries operated at high rates using crude from strategic reserves, while some capacity shifted toward producing diesel and jet fuel to address supply concerns.

US gasoline futures rose about 3% to above $3.10 per gallon in early June, trimming recent losses amid ongoing uncertainty over a potential US–Iran peace agreement that could ease supply pressures. Both sides were reportedly working on revisions to a draft accord aimed at prolonging a ceasefire and reopening the Strait of Hormuz, although signs of substantial progress remained limited. Further heightening uncertainty, tensions in Lebanon escalated as Israeli advances and clashes with Hezbollah raised spillover risks. 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.