Gasoline Margins Ease From Four-Year High Amid Houthi Blockade Threat

Northwest European gasoline refining margins eased on Monday but held near a four-year peak, as a newly declared naval blockade by Yemen's Houthi group on Saudi Arabia stoked fears of significant supply disruptions in the Red Sea.

Geopolitical Tensions Support High Margins

The slight pullback in margins, which fell by approximately $1 to $44.43 per barrel, did little to cool a market rattled by escalating geopolitical tensions. The Iran-aligned Houthis in Yemen announced on Monday the establishment of a naval blockade on Saudi Arabia, a move that threatens to disrupt crucial energy trade routes, according to a report from Investing.com.

This development represents a new front in the wider regional conflict involving the United States and Iran. It expands the threat to global energy supplies beyond the already-strained Strait of Hormuz, a critical chokepoint for the world's oil shipments.

Market Activity

Trading activity in the European gasoline barge market remained active on Monday. According to market data service Argus:

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• 6,000 tons of Eurobob E5 barges changed hands, with BP, ExxonMobil, and TotalEnergies selling to Gunvor.
• An additional 2,000 tons of Eurobob E10 barges were sold by Shell to BP.

Separately, in the Platts pricing window, ExxonMobil sold one E5 barge to trading house Trafigura.

Impact on Consumer Prices

The sustained high cost of producing gasoline is translating directly to consumers at the pump. In the United States, average pump prices surpassed the $4 per gallon threshold on Monday, reflecting the high refining margins and underlying crude oil costs that have been exacerbated by the renewed hostilities and supply chain risks.