Gas Prices to Remain Elevated Despite Oil Market Stabilization

President Trump has managed to calm crude-oil markets even amid ongoing Iran conflict, but gasoline prices—more critical to consumers—remain elevated. While U.S. benchmark crude prices hover around $80 a barrel, up 18% from pre-war levels, gasoline prices have surged 32% to $3.94 a gallon, according to OPIS. The key divergence lies in the lack of buffers in refined product markets, meaning even a ceasefire won’t immediately ease fuel costs.

Geopolitical Shock Absorbers and Crude Oil Dynamics

■Crude oil markets found unexpected relief through China’s import cuts, dropping to 5.7 million barrels/day in June from 11 million before the conflict.

■Strategic petroleum reserves released 2.4 million barrels/day (May) and 1.5 million barrels/day (June), but these were primarily crude, not refined fuels.

■Gasoline crack spreads—the margin between gasoline and crude prices—averaged 90 cents/gallon, hitting a four-year high.

Refining Capacity Constraints in Conflict Zones

■Major refining hubs in the Middle East and Russia have seen severe capacity reductions due to hostilities.

■Global refineries processed 5.1 million fewer barrels/day in Q2 compared to 2025, per IEA data.

■China, traditionally a net exporter of gasoline and diesel, has reduced refined product exports significantly, exacerbating supply tightness.

Bora Yalın’s Analysis: The disconnect between crude and gasoline prices underscores structural vulnerabilities in global energy logistics. With refining bottlenecks persisting in conflict zones and China’s export restraint, capital flows may increasingly favor energy-linked assets. This sets the stage for heightened volatility in risk-on/risk-off cycles, particularly as hedge funds recalibrate positions in response to supply chain frictions.