US Gas Prices Drop Below $4 for First Time Since March After Iran Deal
Following the preliminary US-Iran agreement to end the war and reopen the Strait of Hormuz, average US gas prices fell below $4 per gallon, offering some relief to drivers, though prices remain higher than before the conflict.
The average price of a gallon of regular gasoline in the US dropped to $3.999 on Thursday, according to AAA, the first time under $4 since March. The decline follows the announcement of a preliminary deal between the US and Iran that aims to end hostilities and reopen the Strait of Hormuz. However, prices are still about $1 more per gallon than before the US joined Israel in attacking Iran in February, and roughly 25% higher than a year ago. The war has driven up not only gas but also airline fares, groceries, and other goods due to supply chain disruptions. Experts caution that even if oil and other supplies begin flowing again, the impact on prices will persist. Patrick Penfield, a supply chain professor at Syracuse University, noted that depleted inventories and ongoing supply chain issues will keep prices climbing through 2026, with higher fertilizer costs leading to increased food prices by autumn. He also cited limited US refinery capacity as a bottleneck. US inflation has already hit a three-year high. While the national average is $3.999, prices vary widely: California and Hawaii average over $5.50, while Indiana and Texas are around $3.40-$3.49. Crude oil prices have fallen, with Brent below $78 and US crude at $74, still above pre-war levels but down from over $100 weeks ago. Major shipowners have begun moving vessels through the Strait of Hormuz after the memorandum of understanding, though experts say it may take weeks to return to normal. US Central Command stated it has lifted its blockade on all maritime traffic to and from Iranian ports in the strait.
