U.S. gasoline prices have fallen below $4 per gallon for the first time since mid-April. The decline comes as oil markets react to a tentative agreement between Washington and Tehran to end months of conflict and reopen the Strait of Hormuz.
According to GasBuddy data, the national average price of gasoline dropped to $3.99 per gallon late Sunday after falling 9.3 cents over the past week. Prices are down 52.4 cents from a month ago, although they remain more than 90 cents higher than they were a year ago.
The decline follows news that the United States and Iran reached a framework agreement aimed at ending the nearly four-month conflict and restoring oil flows through the Strait of Hormuz, one of the world’s most important energy shipping routes. The prospect of renewed oil exports and reduced geopolitical tensions has pushed crude oil prices sharply lower.
“Average gasoline prices fell in 47 states over the last week, with the national average dropping below $4 per gallon late Sunday for the first time since mid-April,” Patrick De Haan, GasBuddy’s head of petroleum analysis, said. “The decline came as oil prices moved sharply lower in reaction to news of a potential deal between the United States and Iran, though it remains to be seen whether the agreement will hold.”
Oil markets responded immediately to the diplomatic breakthrough. West Texas Intermediate crude fell to around $80 per barrel, while Brent crude dropped to roughly $83 per barrel. Both benchmarks are down more than 11 percent from a week ago as traders removed much of the risk premium that had built up during the conflict.
President Donald Trump announced that the United States and Iran had agreed to a memorandum of understanding to end the conflict. He also said the Strait of Hormuz would reopen and that restrictions on Iranian maritime trade would be lifted. A formal signing ceremony is expected later this week in Switzerland.
Despite the recent drop in prices, analysts cautioned that relief at the pump may take time. Tankers remain backed up in the Persian Gulf, and energy infrastructure disrupted during the conflict could take weeks or months to return to normal operations.
GasBuddy reported that the most common gasoline price across the country is now $3.79 per gallon, while the median price stands at $3.81. Indiana, Texas, and Oklahoma currently have the lowest average gasoline prices, while California, Hawaii, and Washington remain the most expensive states for drivers.
Government data also show that gasoline inventories remain relatively tight. U.S. gasoline stocks stood at 215.1 million barrels in early June, the lowest seasonal level in a decade. Strong domestic demand and exports have continued to draw down supplies, raising concerns that prices could move higher again if global oil flows are disrupted.
De Haan said the next major test will be whether shipping through the Strait of Hormuz resumes normally.
“The real test now shifts to the Strait of Hormuz, where any reopening and resumption of normal oil flows would be the clearest signal that this relief is durable,” he said. “For now, the national average could continue falling, provided there isn’t a drastic reversal and the U.S. and Iran continue moving in a positive direction.”