NEW YORK — U.S. gasoline prices have fallen below $4 per gallon for the first time in more than five months, as a preliminary agreement between the United States and Iran eases tensions over the Strait of Hormuz and boosts expectations for increased oil supply.
The national average price for regular gasoline dropped to $3.999 on Thursday, according to the American Automobile Association, marking the first time it has been below $4 since March.
The decline follows a memorandum of understanding signed by President Donald Trump with Iran that includes a ceasefire framework and plans to reopen the Strait of Hormuz, a critical shipping route disrupted during recent conflict. Oil prices have also eased in response to the agreement.
"Gas prices are at $3.999 on average in the U.S., according to AAA," one report noted, attributing the drop to falling crude oil costs after the deal.
Prior to the agreement, U.S. gasoline prices had climbed significantly amid the closure of the Strait of Hormuz, which carries a substantial portion of global oil shipments. The national average had peaked above $4.50 per gallon in May, AAA data showed.
The U.S. is a major oil producer, which has helped buffer some domestic impacts compared to other countries. However, global supply disruptions still pushed prices higher earlier this year. Details on the exact volume of oil expected to flow through the reopened strait in the coming weeks remain unclear, with analysts saying full normalization could take time.
Iranian officials have not issued immediate detailed comments on the implementation timeline, while U.S. officials have described the agreement as a step toward de-escalation. The deal includes provisions for Iran to dilute its stockpile of highly enriched uranium and for the waiving of certain sanctions.
Prices continue to vary widely by state, with higher averages reported in California and lower ones in parts of the South. The temporary easing of tensions has contributed to the recent downward trend, though experts caution that full recovery to pre-conflict levels may take months due to logistical challenges in resuming shipments.
As of Friday, the downward movement in pump prices continued, trailing the drop in crude benchmarks, according to industry reports. The latest status of the agreement and its effect on global energy markets will depend on further developments in negotiations between the parties involved.
