Gasoline Turns Lower

US gasoline futures fell to around $3.26 per gallon on Thursday, trimming gains from the previous session as markets weighed mixed geopolitical developments. Iran and Oman reached an agreement on the allocation of their respective shares of the Strait of Hormuz’s waters and related revenues, although Tehran cautioned that the deal alone would not be sufficient to reopen the vital waterway. Crude also appeared to be flowing out of the Persian Gulf. Meanwhile, Russia is reportedly preparing to intensify attacks on Ukraine after determining that peace negotiations have reached a dead end, capping the decline. The developments fueled concerns over prolonged Russian refined-product export restrictions, as Ukrainian strikes pushed refinery runs toward multiyear lows. Against this backdrop, EIA data showed US gasoline inventories fell by 2.536 million barrels in the week ending August 21, more than expected, leaving stocks 6% below the five-year average.

US gasoline futures rose above $3.30 per gallon, breaking a three-session decline, as hopes of a reopening of the Strait of Hormuz were offset by tighter supply prospects. EIA data showed US gasoline inventories fell by 2.536 million barrels in the week ending August 21st, well above expectations, leaving stocks 6% below the five-year average and underscoring continued tightness in the fuel market. According to AAA, the average US regular gasoline price rose to $4.101 per gallon on August 26th. Meanwhile, Ukraine continues striking major Russian refineries, pushing runs toward multiyear lows, while Moscow extended its gasoline export ban. Offsetting some of the upward pressure, Oman and Iran reached an agreement over the use of the Strait of Hormuz, although Tehran warned that this would not lead to an immediate reopening. Meanwhile, Saudi Arabia’s oil loadings appear to be rising sharply as shipments are being redirected due to threats from Yemen’s Houthis in the Red Sea.

US gasoline futures fell to around $3.20 per gallon, declining for a third consecutive session, after reports that Iran and Oman had discussed an interim plan to resume shipping through the Strait of Hormuz. The proposal calls for a temporary maritime route to support vessel traffic through the key oil chokepoint, while further talks are expected to address permanent transit routes, traffic management, information sharing and maritime security. At the same time, Washington’s latest measures targeting Iran were less aggressive than anticipated, with the US refraining from imposing secondary sanctions on Iran’s trading partners. US refineries have now operated above 95% of capacity for more than 11 weeks, the longest sustained stretch in over 25 years, helping bolster fuel output as global supplies face disruptions. Still, gasoline inventories remained around 5% below the five-year average, underscoring continued tightness in the fuel market.