The average price of US gasoline fell below $4 per gallon on Thursday. gallon for the first time in months after Iran and the United States signed a tentative agreement to halt hostilities for 60 days and reopen the Strait of Hormuz.
The national average for a gallon of regular gasoline fell a fraction of a penny below $4, down from $4.03 the previous day, according to the AAA motor club.
Still, gas prices hovered just below $3 a barrel. gallon, before the first US-Israeli attack on Iran in late February. They rose to about $4.50 per gallon in May as tight energy supplies from the Middle East pushed up the price of crude oil, a key ingredient in gasoline.
Prime Minister Shehbaz Sharif of Pakistan, who helped broker the deal, said in a statement on X that the memorandum of understanding had been signed electronically by the US and Iranian presidents. As a result, the agreement to begin reopening the strait and lifting the U.S. naval blockade “would go into effect with immediate effect,” he wrote.
Rising fuel costs have squeezed household budgets and pushed up prices across the economy. At one point in the early days of the war, oil prices rose to nearly $120 per barrel. barrel – the highest level since Russia’s invasion of Ukraine in 2022 – which contributed to a sharp increase at the pump.
Oil prices have fallen about 10 percent this week alone. Even so, gas prices remain about a third higher than before the start of the war.
“We are approaching the numbers we were before the war started,” President Trump said Monday in France at the annual Group of 7 summit.
Other fuel prices are also starting to fall. Diesel cost $5.13 per gallon. gallon Thursday, down from more than $5.60 a gallon.
High gas prices have soaked into Americans’ lives beyond the pump, including travel. For example, airfares rose nearly 27 percent in May, partly due to rising jet fuel costs.
Economists warn that it will take time for lower oil prices to be fully reflected in the price of gasoline. Regional differences remain significant, driven by variations in government taxes, distribution costs and refining capacity. Drivers in parts of the Great Plains and the South have been among the first to see prices drop below $4, with some areas approaching $3.50 per ride. gallon. On the West Coast, however, prices remain well above $4 per gallon.
Aruni Soni contributed with reporting.
