U.S. gasoline prices extend six-week decline as Iran diplomacy eases supply fears

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US gasoline prices decline

Highlights

The U.S. national average gasoline price falls 14.1 cents to $3.85 per gallon, with Colorado, Arizona, and Ohio seeing declines of up to 25 cents.
Refinery outages include TotalEnergies' 238,000 bpd Port Arthur shutdown and a fire at Marathon Petroleum’s 631,000 bpd Galveston Bay facility, tightening supply.
Despite tankers moving through the Strait of Hormuz, transit levels remain well below pre-conflict norms, and renewed U.S.-Iran tensions could quickly trigger price spikes.

Weekly price drop spreads across states

As reported by Reuters, price-tracking service GasBuddy says the national average gasoline price falls 14.1 cents a gallon over the last week to $3.85 per gallon on Monday.

Prices decline in most states, with gasoline down 25 cents per gallon in Colorado over the past week, 22 cents in Arizona and 21 cents in Ohio, according to GasBuddy data.

The lower pump prices may ease political pressure on U.S. President Donald Trump and Republicans as they try to defend narrow congressional majorities in November's midterm elections after facing consumer criticism over high fuel costs.

Refinery outages and Hormuz risks cloud outlook

StoneX analyst Alex Hodes says the latest decline should help ease inflation, but he warns that expectations for energy flows through the Strait of Hormuz to return to normal remain a large assumption and that setbacks are possible in the coming months.

Supply risks persist. Two smaller crude tankers sail through the Strait of Hormuz on Monday although Iran says it again closes the waterway over the weekend, while overall transit levels remain well below those seen before the conflict starts in late February.

Patrick De Haan, head of petroleum analysis at GasBuddy, says gasoline prices are not at significant risk of a spike because some vessels continue to move through the strait. He adds that a deterioration in relations between the U.S. and Iran could quickly change that outlook.

Tighter supplies from refinery outages and the approaching Atlantic hurricane season could also reverse recent declines. TotalEnergies shut down its 238,000 barrel-per-day refinery in Port Arthur, Texas, last week after a lightning strike knocked out power, with a full restart expected within seven days, while a fire breaks out on Sunday at Marathon Petroleum's 631,000-barrel-per-day Galveston Bay Refinery in Texas City, Texas.

Our earlier coverage on the Trump administration’s easing of economic pressure on Iran explained how Washington signaled a shift toward limited sanctions relief after initial steps in U.S.-Iran talks. We outlined plans to allow imports of Iranian oil and refined products for a time, alongside the unfreezing of certain Iranian funds intended for essential goods, moves that could influence global crude supply expectations.

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