Today Markets Analysis: US gasoline prices have risen to around $3.37 per gallon, approaching a seven-week high as a series of disruptions across the global oil and refining network raise concerns about crude availability and refined-product supplies. From Saudi Arabia and the Strait of Hormuz to the Red Sea and Russian refineries, multiple supply risks are emerging simultaneously, increasing the pressure on an already tight energy market.

Global Supply Disruptions Drive Fuel Prices Higher

The latest move in gasoline prices is being driven less by a single disruption and more by the accumulation of several supply risks.

Saudi Arabia’s closure of its East-West oil pipeline has added to concerns over crude transportation and availability, while continuing attacks on energy infrastructure and disruptions to shipping through the Strait of Hormuz are increasing uncertainty over Middle Eastern supply.

At the same time, disruptions along Yemen’s Red Sea coast are affecting shipping through the Bab el-Mandeb Strait, another strategically important route for global energy flows.

The combined effect is a growing risk premium across crude and refined petroleum markets.

Russian Refinery Attacks Add Refined-Product Risk

The supply problem extends beyond crude oil.

Attacks on Russian refineries are creating additional uncertainty around global refined-product supplies. Refinery disruptions can be particularly important for gasoline markets because even when crude remains available, reduced refining capacity can restrict the amount of finished fuel reaching consumers.

This distinction matters for US gasoline prices. The market is not simply responding to concerns about crude production; traders are increasingly pricing the possibility of disruptions across the entire supply chain from crude transportation to refining and distribution.

US Gasoline Inventories Remain Below Average

US inventory data provides another reason for the market to remain sensitive to supply shocks.

According to EIA data, US gasoline inventories increased by 1.3 million barrels during the week ended September 4.

However, inventories remained approximately 5% below the five-year average.

That leaves the market with less of a cushion if further disruptions occur.

A modest inventory build therefore does not necessarily remove bullish pressure. If stocks remain below their seasonal norm while geopolitical risks increase, even relatively small supply interruptions can have a disproportionate impact on prices.

Refiners Have Limited Room to Increase Output

US refineries have been operating close to full capacity, but fuel production nevertheless declined.

This creates an important constraint.

Strong refining margins are already encouraging refiners to maximise production, meaning there may be limited additional capacity available to compensate for further disruptions.

In other words, the market has strong economic incentives to produce more gasoline, but the physical refining system may have limited ability to respond.

That makes inventory levels and refinery utilisation increasingly important indicators for gasoline traders.

Retail Prices Remain Elevated

The pressure is also being felt at the pump.

According to AAA, the national average price for regular gasoline reached approximately $4.30 per gallon on September 11.

The difference between wholesale gasoline futures and retail prices also highlights the broader transmission mechanism between crude markets, refining margins, inventories, transportation costs and consumer fuel prices.

If elevated crude prices persist, the pressure could eventually feed further into transportation costs and broader inflation expectations.

Gasoline Market Balance

The balance remains skewed toward higher prices because the bearish inventory build is being outweighed by the market’s relatively limited supply cushion and growing geopolitical risks.

What Traders Are Watching Next

The gasoline market is likely to remain highly sensitive to developments across both crude and refined-product markets.

Traders will be watching:

• Further developments around the Strait of Hormuz.
• Saudi oil infrastructure and pipeline operations.
• Shipping activity through the Bab el-Mandeb and Red Sea.
• Additional attacks on Russian refineries.
• Weekly US gasoline inventory changes.
• US refinery utilisation and gasoline production.
• Brent and WTI crude prices.
• Whether gasoline futures can break above the current seven-week range.

The critical question is whether the current disruptions remain temporary or begin creating a sustained reduction in global refined-product availability.

Today Markets View

The gasoline market is becoming increasingly vulnerable to a supply shock.

US inventories have improved slightly, but stocks remain below their five-year average while refiners are already operating at high utilisation rates. That means the market has relatively little spare capacity to absorb another major disruption.

Louis Roche, Analyst at Today Markets, said:

“The important development in gasoline is not simply that prices are rising. It is that several independent supply risks are appearing at the same time while US inventories remain below their historical average. Refiners are already incentivised to maximise production, so if crude or refined-product flows are disrupted further, the market may have limited capacity to respond. That creates the potential for gasoline prices to move sharply higher if the geopolitical situation deteriorates.”

Bottom Line

US gasoline prices have climbed toward $3.37 per gallon, approaching a seven-week high as global energy infrastructure and shipping disruptions intensify.

Although US gasoline inventories increased by 1.3 million barrels, stocks remain 5% below the five-year average, while domestic refiners have limited room to significantly increase production.

With risks emerging across the Middle East, Red Sea shipping routes and Russian refining infrastructure, the gasoline market is increasingly being driven by the possibility of a broader supply disruption rather than a single isolated event.

Analysis by Louis Roche, Analyst, Today Markets