US petrol prices ease despite ongoing uncertainties with Iran
US gas prices have dropped to an average of $3.86 per gallon but remain above pre-conflict levels. Hopes for peace talks keep prices in check, but uncertainty over a ceasefire prevents further declines.
US President Donald Trump is touting relief at the pump as gas prices begin to fall following the reopening of the Strait of Hormuz in mid-June. According to the American Automobile Association (AAA), the average price of a gallon (3.78 litres) of petrol has dropped to $3.86, down from a mid-May peak of $4.48. However, prices remain well above the $2.98 per gallon recorded on February 28, when the United States and Israel first launched strikes on Iran.
Despite renewed diplomatic efforts between the US and Iran, a fresh exchange of attacks on Sunday led to a more than one percent increase in oil prices on Monday. Analysts suggest that hopes for a peace deal have prevented a larger spike. “The declines came despite a turbulent week, as fresh attacks were traded between the US and Iran before both sides agreed to halt hostilities just in time Sunday, preventing what could have been a significant spike in oil prices,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
Uncertainty around a stable ceasefire continues to weigh on supply chains, keeping prices from falling further. Analysts note that even if the peace deal holds, it would take several months for prices to return to pre-war levels, as the US Strategic Petroleum Reserve has dropped to its lowest level since the Reagan administration. Meanwhile, oil companies like Saudi Aramco are still loading tankers; on Monday, a vessel capable of carrying two million barrels was loaded, following three similar loadings over the weekend.
