U.S. gasoline prices dip below $4 per gallon after Iran-U.S. agreement
The national average for regular gasoline fell to just under $4 a gallon following a preliminary cease-fire deal between the United States and Iran, while oil and diesel prices also eased.
The average price of regular gasoline in the United States slipped to a fraction of a penny below $4 per gallon on Thursday, according to the American Automobile Association, after the United States and Iran signed a preliminary agreement to halt hostilities for 60 days and reopen the Strait of Hormuz. The price fell from $4.03 the previous day.
Oil prices declined about 10 percent over the week, contributing to the drop in pump prices, though they remain roughly one-third higher than before the conflict began. Diesel prices also eased, reaching $5.13 per gallon, down from over $5.60 a month earlier, providing relief to commercial users.
Prime Minister Shehbaz Sharif of Pakistan, who helped mediate the deal, posted on X that the memorandum of understanding had been signed electronically by the U.S. and Iranian presidents and would take effect immediately.
"We’re getting close to the numbers we were before the war started," President Donald Trump said at the Group of Seven summit in France.
Economists noted that lower crude prices do not translate instantly into gasoline costs, and regional variations persist because of differing state taxes, distribution expenses and refining capacity. Prices have fallen below $4 in parts of the Great Plains and the South, with some areas near $3.50, while West Coast rates remain above $4.
The decline in fuel costs also impacts related expenses, such as air travel, where ticket prices rose nearly 27 percent in May due in part to higher jet fuel costs.
