Gasoline Holds Near 2-Month Highs

US gasoline prices traded around $3.38 per gallon, remaining near the highest level in two months, as markets weighed renewed diplomatic efforts between the US and Iran against escalating military exchanges. Iran said it had received a 10-day ceasefire proposal from mediators aimed at preserving the interim agreement and advancing a lasting peace deal. The diplomatic push followed another night of US strikes on Iranian cities and Iranian attacks on US military assets across the region. Amid the tensions, shipping activity through the Strait of Hormuz came close to a standstill. Adding to supply concerns, Yemen's Houthi militants threatened to blockade shipping to and from Saudi Arabia through the Red Sea. Meanwhile, Ukrainian attacks on Russian energy infrastructure continued to disrupt refinery operations, while stronger diesel and jet fuel margins prompted refiners to curb gasoline output. At the pump, average US gasoline prices climbed back above $4 per gallon.

Gasoline futures in the US climbed above $3.40 per gallon, reaching their highest level since May 22, as escalating conflict in the Middle East heightened concerns over disruptions to global refined fuel supplies. Iran declared the ceasefire with the US effectively over as both sides expanded attacks beyond military targets to critical infrastructure, dimming hopes for a return to the fragile truce. Meanwhile, Ukrainian strikes on Russian energy infrastructure continued to disrupt refinery operations. Refiners in the US and other regions also shifted production toward higher-margin diesel and jet fuel, reducing gasoline output. EIA data showed gasoline inventories fell by 1.5 million barrels in the week ended July 10, leaving stockpiles about 14 million barrels below their five-year seasonal average and at their lowest level for this time of year since 2012. US gasoline crack spread to its highest level since June 2022, while retail gasoline prices climbed back above $4 per gallon.

Gasoline futures in the US rose above $3.30 per gallon, remaining close to their highest level since late May, driven by growing concerns over global refined fuel supplies. The collapse of the US-Iran truce and renewed tanker attacks in the Strait of Hormuz heightened fears of disruptions to fuel shipments from the Persian Gulf. Additionally, Ukrainian strikes on Russia's energy infrastructure continued to hamper operations at major refineries. US and global refiners also reduced gasoline output in favor of higher-margin diesel and jet fuel production, while strong overseas demand pushed US fuel exports to record highs. EIA data showed gasoline inventories fell by 1.5 million barrels in the week ending July 10, leaving stockpiles about 14 million barrels below their five-year seasonal average and at their lowest level for this time of year since 2012. The US gasoline crack spread climbed to about $59 per barrel, its highest level since June 2022.