Oil and gas prices falling fast in June. Too fast for reality

One of the odd developments that I've seen in recent weeks is how oil futures have plunged back toward what they were before the US went along with Israel's plan to drop bombs on Iran. And it's clearly based on future hopes that oil supplies will recover to pre-war levels, despite the fact that the amount of supply coming out of the Persian Gulf the Middle East today .

is nowhere near where it was back in February.

Graph of Strait of Hormuz crossings since June 2025. See that little spike all the way on the right? The one that's much lower than the leftward 2/3 of the graph, and immediately crashes back down? That's what the US government and quite a bit of US media tell us is fully open, with normal traffic.

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— Nicholas Grossman (@nicholasgrossman.bsky.social) June 21, 2026 at 4:30 PM

Before we've gotten to August, which is when those sub-$70 oil contracts are dated to, we've seen national gas prices fall below $4 a gallon ahead of next week's high-travel 4th of July weekend. That's well ahead of what happened the last time gas prices spiked up in the US, back in the first half of 2022, when prices got up past $5 a gallon nationwide and didn't get under $4 a gallon until August.

What's interesting is that, if anything, gas was more plentiful in the US at this time in 2022 than it is today.

Another interesting trend is that while Americans were using much more gas in March and April 2026 vs the same months in 2022. But that has now changed, and the amount of usage has now dropped to similar levels in May and June, which may indicate some recent adjustments in habits and vacation plans.

In both 2022 and 2026, the US has released oil from the country's Strategic Petroleum Reserve to temper oil prices. But we had much less oil in that reserve when prices shot up in 2026, while the depletion has been happening at the same rate in both years.

So I look at these numbers and am confused and suspicious over why gas and oil prices are so much lower than they were at this time in 2022. The supply availbility today is the same or lower than it was in 2022, with supplies in other parts of the world even lower, so you'd think the world market price for oil would go lower as well. Stocks aren't going to be replenished any time soon, especially if we keep on bombing Iran after the markets close, but the oil markets ignore this reality in favor of....hope? Avoidance?

Plus, even after shipments from the Straits of Hormusz get halfway back to pre-war levels, there's so much less in reserve from the SPR in America that there has to be at least some kind of risk premium that keeps oil and gas prices higher than they were in 2023 or 2024. That is, if we have markets that take into account supply and demand of actual products these days (and that does feel like an "if").

Something feels fishy when it comes to the oil/gas situation these days, and that there has to be some kind of correction coming from what seems to be an absurd amount of recent selling and price declines that appears out of touch with what the actual situation is.