Oil and gas prices drop in time for Fourth of July driving
Oil and gas prices fell ahead of the Fourth of July weekend, as shipping traffic through the Strait of Hormuz picked up, easing the global supply strains created by the war with Iran.
International benchmark Brent crude was trading at $72.05 a barrel as of Friday afternoon, while the U.S. benchmark West Texas Intermediate stood at $69.41 per barrel, with both benchmarks at their lowest since before the war in Iran. During the conflict, oil prices had climbed to around $100 a barrel.
The decline in crude prices has translated to some relief at the pump. The national average for gasoline has fallen to $3.90 a gallon, down from $4.49 a month ago. The drop comes ahead of the Fourth of July travel period, when AAA forecasts that nearly 72.2 million people will travel.
Gas prices have declined over the past six weeks, but GasBuddy projects that this will be the second-most expensive Fourth of July at the pumps.
GasBuddy said on Thursday that, while the average price for a gallon has improved from May’s peak of $4.57, it is still about 65 cents higher than last Fourth of July’s $3.10 per gallon average.
“Six weeks of declines sounds like good news, and in some ways it is, but the context matters,” Patrick De Haan, head of petroleum analysis at GasBuddy, said in a statement.
“The U.S.-Iran agreement gives markets hope, but it’s being tested, and any breakdown in those talks could reverse the recent relief quickly. Drivers should use every tool available to find the lowest prices near them before filling up,” De Haan said.
Traffic in the Strait of Hormuz has increased throughout the week, with shipping transit hitting a daily record high since the war in Iran started.
According to the latest data from S&P Global MINT and S&P Global Commodities at Sea, 78 vessels passed through the Strait of Hormuz on Thursday, making it a new daily record. The previous high was 49 vessels.
The war in Iran effectively closed the Strait of Hormuz, leaving vessels at a standstill since late February. The closure of the strait put a huge dent in supply, as nearly 20 million barrels of oil transited the strait every day before the war, which is about a fifth of daily global demand.
The United States and Iran last week struck a memorandum of understanding agreeing to a ceasefire and reopen the Strait of Hormuz.
However, the interim peace deal between the two remains fragile. The International Maritime Organization on Thursday said it would pause its evacuation operations in the waterway, following an attack on a vessel.
U.S. officials said on Thursday that the Islamic Revolutionary Guard Corps had “struck” a cargo ship “with a drone.” President Donald Trump warned that the attack was a “foolish violation” of the two countries’ interim peace deal.
The safety of vessels transiting the waterway has been a significant concern among those in the maritime and shipping industry due to the threats of attacks and mines.