Key Highlights

• US gasoline prices fell 2.35 percent to 2.8759 dollars per gallon, near their lowest level in more than three months.

• Crude shipments through the Strait of Hormuz topped 10 million barrels per day under US military protection.

• Gasoline inventories fell by a larger-than-expected 2.333 million barrels in the week ended June 26.

• US officials, including Treasury Secretary Scott Bessent, have publicly urged oil and gas companies to cut fuel prices.

Prices Reverse Much of Their Conflict-Driven Surge

US gasoline prices fell to around 2.90 dollars per gallon on Thursday, hovering just above their lowest level in more than three months as the fuel reversed much of the price surge triggered by the Middle East conflict over the past quarter. The decline tracks the broader normalization in crude oil supply, particularly through the Strait of Hormuz, where shipments have now topped 10 million barrels per day under US military protection, according to a US official.

The UAE has also restored its exports to pre-war levels by relying on alternative shipping routes, while Iran's own crude shipments have exceeded 40 million barrels following the end of the US naval blockade. These developments collectively point to a rapidly improving physical supply picture for crude, the primary input cost for gasoline production.

Inventory Drawdown Contrasts With Falling Prices

Despite the price decline, inventory data presented a somewhat contrasting signal. Gasoline inventories fell by a larger-than-expected 2.333 million barrels in the week ended June 26, a drawdown that would typically be associated with tightening supply and potential upward price pressure.

The fact that prices continued to decline despite this inventory drawdown suggests that broader crude supply normalization and easing geopolitical risk premiums are currently outweighing more localized inventory dynamics in shaping gasoline price direction.

Political Pressure Adds to Downward Momentum

President Donald Trump reportedly welcomed progress in ongoing negotiations following another round of indirect talks, adding a further supportive signal for continued price softening. Separately, US Treasury Secretary Scott Bessent urged oil and gas companies to cut fuel prices, a call that came one day after President Trump directly asked retailers to lower gasoline prices.

This combination of easing supply constraints and direct political pressure on industry pricing could continue to weigh on gasoline prices in the near term, particularly if crude flows through the strait remain elevated. However, any renewed disruption to the fragile diplomatic process could reverse this trend given gasoline's sensitivity to crude oil cost inputs.

Conclusion

Gasoline prices have retraced much of their conflict-driven gains as Strait of Hormuz supply normalizes and diplomatic talks show incremental progress. The combination of improving physical oil flows and direct government pressure on fuel pricing suggests further downward momentum is plausible in the near term. Continued monitoring of both crude supply trends and inventory data will likely be necessary to assess whether this decline proves durable.