Gasoline Hits 7-Week High

US gasoline prices rose toward $3.20 per gallon, reaching their highest level in seven weeks as renewed geopolitical tensions heightened concerns over global supply disruptions. President Donald Trump announced plans to restore a blockade on Iranian vessels passing through the Strait of Hormuz while also imposing a 20% charge on all other cargo using the waterway, raising fears of disruptions to energy supplies. Meanwhile, Ukraine intensified attacks on Russia's energy infrastructure, targeting oil depots in the Stavropol region and storage facilities at the port of Kavkaz in an effort to disrupt Moscow's war efforts. Kazakhstan's Caspian Pipeline Consortium also reported a 7% decline in June shipments due to maintenance at the Tengiz oilfield and lower Russian flows. Adding to the pressure, reduced refining activity, at roughly 65% of seasonal average consumption, contributed to fuel shortages across Russia, which introduced a ban on exports of gasoline.

US gasoline prices rose about 3% toward $3.10 per gallon on Monday, recovering from the previous session's losses as mounting US-Iran tensions heightened concerns over fuel supplies. The US launched fresh strikes on Iran after attacking 140 targets a day earlier in retaliation for an IRGC assault on a container ship transiting the Strait of Hormuz. Iran responded by targeting US military facilities in Jordan, Kuwait, Bahrain, and Oman. Although Tehran declared the strait closed until further notice, US Central Command said commercial vessels could continue lawfully transiting the vital shipping lane. The latest escalation dealt a blow to diplomatic efforts, reversing optimism fueled by reports last week that technical negotiations were still underway. Supply concerns were further reinforced by disruptions in Russia, where gasoline production fell to roughly 65% of seasonal average consumption after repeated Ukrainian drone attacks forced major refineries to suspend operations.

US gasoline futures fell to around $3.0 per gallon, extending their retreat from a one-month high of $3.10 on July 8, as continued technical talks between the US and Iran despite renewed hostilities prompted markets to reassess the supply outlook. Both sides have stopped short of all-out war, and Washington said it remains committed to finding a solution, while some provisions of their interim agreement remain in effect. Although security conditions in the Strait of Hormuz have deteriorated and tanker traffic has slowed, investors expect the waterway to remain open. Selected laden tankers from the UAE continued to load and sail, reducing fears that exports from the region could come to a standstill. The prospect of a crude supply glut amid higher OPEC+ output also weighed on prices, though concerns remained over whether global refineries have sufficient capacity to process the additional supply.