American motorists received some relief at the pump Thursday as the national average price for regular gasoline slipped below $4 per gallon for the first time in months, following a preliminary agreement between the United States and Iran to pause hostilities and begin reopening the Strait of Hormuz.
According to AAA, the national average fell to just under $4 per gallon, down from $4.03 the previous day.
Gas prices had been hovering just below $3 per gallon before the conflict began with U.S.-Israeli strikes on Iran in late February. They later climbed to roughly $4.50 in May as Middle East energy supplies tightened and crude oil prices surged, noted The New York Times.
Pakistan Prime Minister Shehbaz Sharif, whose government helped mediate the agreement, posted on Twitter that the memorandum of understanding had been signed electronically by the American and Iranian presidents. He said the deal to begin reopening the strait and lifting the U.S. naval blockade would “enter into force with immediate effect.”
Crude oil prices, which rose to nearly $120 a barrel in the early days of the war — their highest level since Russia’s 2022 invasion of Ukraine — have fallen about 10 percent this week. Even after the recent decline, gasoline prices remain roughly one-third higher than they were before the fighting began.
“We’re getting close to the numbers we were before the war started,” President Trump said Monday while attending the Group of 7 summit in France.
Other fuel prices have also begun to ease. Diesel averaged $5.13 per gallon Thursday, down from more than $5.60 a month earlier, offering some relief to truckers, farmers and other large diesel users.
The broader economic effects of higher fuel costs have already been felt beyond gas stations. Airfares rose nearly 27 percent in May, partly because of higher jet fuel prices.
Economists cautioned that lower oil prices do not immediately translate into lower prices at the pump. Regional differences remain sharp because of state taxes, distribution costs and refining capacity. Drivers in parts of the Great Plains and the South were among the first to see prices fall below $4, with some areas approaching $3.50 per gallon. On the West Coast, however, prices remained well above $4.
[Read More: Trump Slammed By Major Donor]
