Gasoline Prices Rise

US gasoline prices rose above $3.40 per gallon, a two-month high, amid growing concerns over tighter fuel supplies. The US continued strikes on Iranian targets for an 11th consecutive night, while Yemen’s Iran-aligned Houthis threatened Saudi oil vessels in the Bab el-Mandeb Strait and announced a blockade of Saudi Arabia. President Donald Trump also ruled out near-term talks with Iran and warned of broader strikes. Outside the Middle East, supply risks emerged in the Black Sea after attacks targeted the Caspian Pipeline Consortium terminal, a key route for Kazakhstan’s crude exports. Meanwhile, Ukrainian strikes on Russian energy facilities continued to disrupt refinery operations, while stronger diesel and jet fuel margins encouraged refiners to reduce gasoline output. Against this backdrop, industry data showed gasoline inventories fell by 1.379 million barrels in the week ending July 17. At the pump, average US gasoline prices climbed back above $4 per gallon.

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.