Oil and gas prices have decreased in advance of the Fourth of July weekend, attributed to increased shipping traffic through the Strait of Hormuz, which has alleviated global supply issues linked to the ongoing conflict in Iran. As of Friday afternoon, Brent crude was priced at $72.05 per barrel, and West Texas Intermediate was at $69.41 per barrel, both figures representing their lowest levels since before the onset of the war in Iran, where prices had previously surged to around $100 per barrel.
The decline in crude prices has resulted in a reduction in gasoline prices, with the national average now at $3.90 per gallon, down from $4.49 a month ago. This drop occurs as AAA forecasts that approximately 72.2 million people will travel during the Fourth of July period.
Despite the recent decrease, GasBuddy projects that this year will see the second-highest gasoline prices for the holiday, with current prices still about 65 cents higher than last year's average of $3.10 per gallon. Patrick De Haan, head of petroleum analysis at GasBuddy, noted that while the six-week decline in prices is a positive development, the situation remains precarious, particularly regarding the U.S.-Iran agreement, which could be tested.
Increased shipping traffic through the Strait of Hormuz has been noted, with a record high of 78 vessels passing through on Thursday, surpassing the previous record of 49 vessels. The war in Iran had previously disrupted shipping in the strait, which is critical for global oil supply, as it typically sees nearly 20 million barrels of oil transit daily.
Last week, the U.S. and Iran reached a memorandum of understanding to agree on a ceasefire and the reopening of the Strait of Hormuz. However, the interim peace deal remains fragile, with recent attacks on vessels raising safety concerns in the maritime industry.