Pump prices fall a sixth straight week as Hormuz reopens and states raise fuel taxes July 1
The war premium is draining out of crude. The Strait of Hormuz reopened, tankers are moving through it again, US drillers added oil and gas rigs as transit resumed, and prices have fallen now that the worst case has passed. US gasoline has dropped for six straight weeks and now sits about 15% below its May peak. Most of the week's other stories tie back to that.
Crude
Two things are pushing oil down at once. Saudi Arabia looks set to cut its official selling prices now that Hormuz is open and the spot market no longer prices in a closed strait. And traders are betting on more Iranian barrels reaching buyers, which knocked crude lower again. Soft demand on top of that gives the market little reason to rally. China's crude imports are tracking toward their weakest level since 2016, so the largest buyer isn't pulling the market tighter.
The supply fear came out of the price quickly, but the cost of making and moving fuel has stayed put. One headline this week made the same point: price can stay high even after the supply problem is fixed. Pump levels are easing because the panic bid is gone, and once that fear is fully out, prices may not fall much more.
Prices
The retail picture is following crude down, region by region. Connecticut's average dipped below $4 for the first time since April. Whatcom County, Washington fell back under $5. AAA Texas says statewide prices should keep sliding into the July 4 holiday, the opposite of the usual pre-holiday bump. Natural gas eased too as the July Nymex contract expired and rolled.
One price story this week has nothing to do with crude. A class action claims gas stations used pricing software to coordinate California pump prices, the kind of algorithm-assisted alignment that has drawn antitrust scrutiny in other industries. If the case has legs, it targets the part of retail margin that holds steady even when wholesale falls. Drivers are paying less this month, but that part of the margin doesn't change when crude moves.
Taxes and policy
A batch of states raise their fuel taxes July 1, so in the same week crude is sliding, some drivers will see the state portion of their fill-up go up. The two move on different schedules. Crude reacts to a strait reopening in days, while a tax bump is set in statute months ahead and lands on July 1 regardless of what oil does. For drivers in those states, part of the six-week price drop gets eaten back at the start of the month.
On the renewables side, Clean Fuels intervened to defend the Renewable Fuel Standard against a legal challenge, which matters to anyone moving biodiesel or renewable diesel volume that depends on RFS demand holding up in court. And the longer-arc question kept surfacing: what happened to Big Oil's green pivot, as majors quietly pull climate spending back toward oil and gas.
The geopolitics is its own policy story. Iraq is pushing for a higher OPEC quota on the back of a post-war production rebound, and Baghdad floated the idea of leaving OPEC entirely while hosting EU energy talks. Iraq is a large enough producer that even floating the idea makes it harder for OPEC to hold output discipline while members want to pump more into a soft market.
Refining
Most of the real refining strain this week is outside the US. Russia is importing jet fuel from Belarus at nearly four times last year's rate after Ukrainian drone strikes knocked out Moscow's main refinery, an unusual position for a major crude exporter. The fuel crunch is pushing the Kremlin toward Kazakhstan for supply, but Kazakhstan just cut its own gas output after a drone strike hit a Russian processing plant it depends on. The strikes are now cutting fuel supply on both the Russian and Kazakh sides.
Closer to home, BP refinery workers are picketing the company's Chicago headquarters to end a lockout that has run about 100 days. A lockout running that long at a major refiner is a supply risk worth watching through driving season. And RBN flagged big changes ahead in how Louisiana refineries source their crude, a quieter shift in feedstock routing that reshapes Gulf Coast economics over time. In Gujarat, India, a gas pipeline caught fire during sewer work when digging equipment hit a line.
Retail
On the c-store side, Bolla Oil launched its first loyalty program across 160 locations. A chain usually adds loyalty at that size when margin competition is tightening. When fuel spreads compress, the inside sale matters more to the store, and a points program is one way to hold onto repeat customers.
Freight
South Carolina Ports temporarily shut down a container terminal, with trade uncertainty cited as the reason. Trade policy drove the shutdown, and it ripples into anything that moves by container through the Southeast. For fuel logistics it is a side note this week, but a shaky freight backdrop tends to show up later in diesel demand.
What to watch
Whether Saudi price cuts and the bet on Iranian barrels keep crude soft through July 4, or whether OPEC quota fights and Iraq's exit talk put a floor under it. Watch how much of the six-week pump drop survives the July 1 state tax hikes in the states raising them. Watch the BP Chicago lockout, now past 100 days, for any sign it dents Midwest supply. And watch Russia's refinery outages and the Kazakhstan knock-on, because those outages are still spreading.