Unlocking the Strait of Hormuz: How Cheaper Oil Will Change the Crypto Market
For the first time in nearly two months, Americans are seeing gasoline prices below $4 per gallon. This became possible because the U.S. and Iran agreed to reopen the Strait of Hormuz. The White House considers this a credit to Donald Trump, but analysts point out that the global oil market is still far from a sustainable recovery.
The decline has continued for the third consecutive week. Since May 21, the average fuel price nationwide has dropped from $4.56 to $4.12, and oil prices have fallen below $100 per barrel.
The agreement with Iran pushed prices below $4, but gasoline is still 28% more expensive than a year ago, when Americans paid $3.13 per gallon.
Gasoline prices drop after the deal with Iran
The agreement concerns the Strait of Hormuz, a waterway through which about one-fifth of the world's oil typically passes. The international benchmark Brent fell 5% to $83.13 on June 15, dropping roughly 30% from its March peak of $119.50 per barrel.
The White House noted that tanker traffic should increase in the coming days, reaching about 50 vessels daily compared to 25 currently. Before the war began, around 130 ships passed through the strait per day.
Trump's victory and risks for the market
According to data from the U.S. Energy Information Administration, the country's strategic petroleum reserve has fallen to its lowest level since 1983. There is virtually no buffer left in the market in case of a new shock.
Bob McNally, president of Rapidan Energy and a former advisor to George W. Bush's White House, warned that the market still needs to replenish a historic loss of 1.5 billion barrels of supply, a process that will take many weeks and months.
What low oil prices mean for the crypto market
Consumer inflation in the U.S. rose from 2.4% in February to 4.2% in May, the highest since April 2023. The Federal Reserve, now led by Kevin Warsh, is set to meet this week. Analysts do not expect a rate change, but the regulator's representatives may drop language hinting at readiness to lower borrowing costs.
Lower oil prices ease inflationary pressure, which could facilitate a decision to cut rates later this year. For Bitcoin and the crypto market as a whole, lower rates and slowing inflation are among the clearest factors encouraging investors to shift toward riskier assets.
My analysis shows that as long as U.S. oil reserves remain at historic lows, any new geopolitical spark could send prices soaring again, and the crypto market, which is currently benefiting from cheaper fuel, would then face dual pressure from inflation and regulation. Investors should closely monitor the level of strategic reserves, as this is a key indicator of the current rally's sustainability.