Oil prices (CL=F, BZ=F) are falling after The Washington Post reported that Israel will not target Iran's oil output. Patrick De Haan, GasBuddy head of petroleum analysis, joins Morning Brief to discuss the state of oil markets amid rising tensions in the Middle East.

Haan points to several factors behind the pressure in oil prices this week. The International Energy Association's (IEA) latest report revealed a surplus of oil while OPEC slashed its demand forecast for both 2024 and 2025. This comes as China and Germany — major players in global oil demand — continue to face significant economic weakness. Coupled with Israel choosing not to target Iran's oil infrastructure, prices have fallen from their recent highs.

"When oil demand is going down seasonally, and then you have all of these other things happening at the same time, oil prices likely will continue struggling here in the weeks ahead," De Haan tells Yahoo Finance.

He believes that the US national average could fall below $3 per gallon for the first time since 2021. He notes that diesel prices are already at their lowest level since 2021.

"We were getting a little worried last week after Iran launched attacks on Israel. Oil prices quickly jumped $10 a barrel, but they've given up just about 80% to 90% of those gains now as we come back down. And I think there is the potential that the national average could dip below that $3 a gallon mark, potentially before Election Day. And keep in mind: a lot of voters are very aware of what gas prices are... It's very timely here as Americans head to the polls that gas prices are declining," De Haan explains.

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This post was written by Melanie Riehl