US gasoline prices dropped below $3 per gallon, reaching a nine-week low, as optimism grew that the United States and Iran are nearing a peace agreement that could end the ongoing conflict.

Key Highlights

  • US gasoline prices fell below $3 per gallon, marking a nine-week low.
  • Iran's Mehr News Agency reported a 14-point draft agreement covering the lifting of oil sanctions.
  • President Trump said a peace deal with Iran could be signed as soon as this weekend.
  • EIA data showed gasoline inventories rose by nearly 0.2 million barrels in the first week of June.

US gasoline prices slipped below the $3 per gallon threshold this week, touching their lowest level in nine weeks as markets responded to signs of progress in US-Iran negotiations aimed at ending the conflict.

According to Iran's semi-official Mehr News Agency, a 14-point draft agreement between Washington and Tehran includes provisions for lifting oil sanctions on Iran. The proposal, however, still requires formal approval from Iranian authorities before it can be implemented, leaving some uncertainty around its final terms.

Separately, US President Donald Trump said that a peace deal with Iran could be signed as soon as the weekend, comments that added further momentum to the decline in gasoline prices and broader energy markets.

The developments have helped ease tensions following a recent period of military escalation, reviving hopes that the Strait of Hormuz, a waterway that handles around one-fifth of global LNG flows, could gradually reopen to normal traffic. A reopening of this scale would be expected to ease supply constraints that have weighed on fuel markets in recent months.

On the inventory side, data from the US Energy Information Administration showed that gasoline stockpiles rose by nearly 0.2 million barrels during the first week of June. The build defied market expectations, which had pointed to a draw of around 0.5 million barrels, adding a fundamental factor to the bearish pressure on gasoline prices.

For consumers, the drop below $3 per gallon represents a meaningful shift after weeks of elevated prices at the pump, while for energy traders, the gasoline price decline aligns with broader weakness across crude oil and other refined products amid the improving geopolitical backdrop.

Market participants continue to monitor developments closely, given that previous reports of progress in US-Iran talks have at times failed to result in finalised agreements, leaving room for renewed volatility in gasoline and crude oil prices depending on how negotiations evolve.