The good news is that gasoline prices have been falling for six straight weeks.
The bad news? Americans are still heading into one of the most expensive Independence Day weekends they’ve ever seen.
GasBuddy projects the national average price of gasoline will be about $3.75 per gallon on July 4—the second-highest on record, trailing only the $4.80 per gallon reached during the energy crisis of 2022.
That’s a far cry from May, when the closure of the Strait of Hormuz sent gasoline prices soaring alongside crude oil. But it’s also about 65 cents higher than last Independence Day and nearly a dollar above where the year began.
So yes, prices are falling. They’re just falling from a very uncomfortable place.
The decline largely mirrors what’s happened in crude markets. Brent briefly slipped toward $72 per barrel this week before recovering to around $75 on Thursday as Middle Eastern supply continued returning to global markets. Saudi Arabia is restarting loadings at its flagship Ras Tanura export terminal, Iraqi exports are ramping higher, and more tankers are cautiously returning to the Persian Gulf.
The keyword there is cautiously.
Traffic through the Strait of Hormuz has improved dramatically over the past week, but it remains well below pre-war levels. Shipping companies are still navigating uncertainty over Iran’s proposed new traffic management system, while Thursday brought fresh reminders that the region remains unstable after a commercial vessel was reportedly struck by an unidentified projectile near Oman and Iranian authorities continued asserting control over shipping routes.
That lingering uncertainty is one reason gasoline hasn’t fallen as quickly as crude.
There’s also the simple reality that retail prices lag wholesale markets. Oil can lose $20 per barrel in a matter of days. The sign at your neighborhood gas station usually gets the memo a little later.
The result? Oil prices are back near where they traded before the war. Gasoline prices aren’t.
By Julianne Geiger for Oilprice.com
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