US fuel pain deepens as US-Iran fighting lifts oil prices

• Oil prices posted their biggest weekly gain in eight weeks (roughly 5.5%) after attacks on tankers in the Strait of Hormuz, which normally carries 20% of global oil and gas supplies
• U.S. gasoline inventories fell 1.9 million barrels to 212.1 million barrels, nearly 10 million barrels below the five-year average, with Gulf Coast stocks particularly strained
• U.S. petroleum product exports hit a weekly record of 8.7 million bpd as domestic refiners capitalize on global supply disruptions in Russia and the Middle East

Market Summary: US Fuel Pain Deepens as US-Iran Fighting Lifts Oil Prices

Key Developments:

U.S. gasoline prices surged 6 cents this week to $3.88 per gallon on Friday, marking the largest weekly increase since mid-May, according to AAA data. The spike follows escalating U.S.-Iran tensions over the Strait of Hormuz, which pushed Brent crude toward a 5.5% weekly gain—the largest in eight weeks.

Geopolitical Impact:

Attacks on tankers in the Strait of Hormuz, a critical waterway carrying 20% of global oil and gas supplies pre-conflict, have reduced flows significantly. Washington suspended permits for Iranian oil sales, further tightening supplies. The conflict, which began February 28, continues to disrupt global energy markets.

Supply Constraints:

Multiple factors are squeezing fuel availability:

• U.S. gasoline inventories fell 1.9 million barrels last week to 212.1 million barrels, nearly 10 million barrels below the five-year average
• Gulf Coast inventories dropped to 76.4 million barrels versus the 82.3 million barrel five-year average
• Refinery outages impacted Marathon Petroleum's Detroit facility (146,000 bpd) and another operator's Pennsylvania plant (190,000 bpd)
• Russian refining disruptions have decimated production of gasoline, diesel, and jet fuel

Export Surge:

U.S. petroleum product exports hit a weekly record of 8.7 million bpd (week ending July 3), as American refiners capitalize on stronger margins amid global supply losses.

Political Implications:

Rising prices pose challenges for President Trump's Republican Party ahead of November midterm elections. The administration has accused oil companies of price gouging and launched investigations while introducing price-cutting initiatives in Pennsylvania and New Jersey.

Analysts expect continued price volatility during the peak summer driving season through early September.