CALGARY — Gasoline prices across North America have continued to decline in recent weeks, but analysts warn renewed tensions involving Iran and the Strait of Hormuz could quickly change the outlook.
Patrick De Haan, head of petroleum analysis at GasBuddy, said falling fuel prices have been driven largely by easing concerns over global oil supply disruptions following recent diplomatic efforts involving the United States and Iran.
However, De Haan said uncertainty remains after Iran suggested it had again closed the Strait of Hormuz, one of the world’s most important oil shipping corridors, and amid renewed warnings of possible military escalation in the region.
“Gasoline prices aren’t yet at significant risk of a spike, as some vessels have continued to move through the Strait,” De Haan said. “Still, should the situation worsen or escalate further, motorists could see that risk change quickly.”
Oil prices have retreated significantly from highs reached earlier this year as markets reduced the risk premium associated with Middle East supply disruptions.
At the same time, analysts caution the situation remains fragile.
Recent complications, including conflicting claims over access to the Strait of Hormuz and the cancellation of planned negotiations between U.S. and Iranian officials, have kept traders on edge despite lower oil prices.
The market’s attention has increasingly shifted from inventory levels to questions about how quickly shipping traffic can normalize and when oil production in the region can fully recover.
Industry analysts say crude prices remain vulnerable to renewed volatility if geopolitical tensions escalate or if energy supplies face additional disruptions.
While lower oil prices have helped ease pressure on motorists in recent weeks, the situation remains highly dependent on developments in the Middle East.
The Strait of Hormuz handles a significant share of the world’s seaborne oil exports, making any threat to shipping traffic through the waterway a closely watched indicator for global energy markets and fuel prices.
De Haan said recent declines in gasoline and diesel prices have provided some relief for consumers, but warned the outlook could shift rapidly if conditions in the region deteriorate.
“The outlook is far from settled,” he said.
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