Gasoline Hits 3-Week Low

US gasoline futures fell toward $3.0 per gallon in early August, declining for the third consecutive session to a three-week low after President Donald Trump canceled a planned attack on Iran, easing some concerns over supply disruptions in the region. Trump said Saudi Arabia and other key Middle Eastern allies had urged him to suspend the planned strikes in favor of renewed negotiations, while reiterating his call for the swift reopening of the Strait of Hormuz. Meanwhile, Gulf producers continued seeking alternative export routes, with Turkey and Iraq extending a pipeline agreement, while Iran said talks with Oman on a new route through the Strait of Hormuz were in their final stages. In Russia, the government extended its diesel and gasoline export ban through January 2027 as fuel shortages persisted amid continued Ukrainian strikes on major oil refineries.

US gasoline futures fell below $3.10 per gallon, retreating further from the two-month high of $3.50 reached on July 23, as investors weighed improving shipping activity against ongoing geopolitical risks. Oil shipments from the Middle East picked up as more vessels left the Persian Gulf with transponders turned off, while two Saudi tankers crossed the Bab el-Mandeb Strait undetected. Additionally, Saudi Arabia proposed an international maritime coalition to protect key shipping routes, with representatives from 43 countries participating in talks to safeguard navigation in the Red Sea following the Iran-backed Houthis' announced blockade against the kingdom. In Russia, the government extended its diesel and gasoline export ban through January 2027 as fuel shortages persisted after Ukrainian drone strikes shut another crude distillation unit. Still, gasoline remained on track for a 5% monthly gain as exchanges of strikes between the US and Iran escalated earlier this month.

US gasoline futures fell to $3.35 per gallon from the two-month high of $3.5 on July 23rd, as markets weighed persistent geopolitical risks against signs that oil flows through the Strait of Hormuz were improving. In the Middle East, oil-shuttling services picked up with data suggesting more barrels are leaving the Persian Gulf through vessels with transponders off, dampening concerns over energy supply. In the Bab el-Mandeb strait, two Saudi tankers also managed to cross the waterway by going dark. Meanwhile, EIA data showed US gasoline inventories rose slightly last week, defying expectations for a decline though stocks remained 6% below the five-year seasonal average. Geopolitical risks nevertheless persisted despite continued mediation efforts by China and Oman to facilitate US-Iran talks. In Russia, the government extended its diesel and gasoline export ban through January 2027 as fuel shortages persisted following Ukrainian drone strikes that shut another crude distillation unit.