The average price of US gasoline fell to just under $4 a gallon on Thursday for the first time since March, following the announcement of a preliminary agreement between the US. Iran to end the war and reopen the strait of Hormuz.
The development has provided some relief to drivers who have seen soaring costs amid Washington’s war with Iran. But filling up still remains more expensive than it was before the conflict began.
According to the motor club AAA. the current national average price for a gallon of regular gasoline stands at $3.999, marking the first time in months that prices have been that low. The decline aligns with easing crude oil costs overall, with some optimism surrounding the initial agreement between the US. Iran.
Still. American drivers are collectively paying roughly $1 more per gallon than they were before the US joined Israel to attack Iran in February. Gas prices are also about 25% higher than they were a year ago. which has put strain on many household budgets across the country.
Gas isn’t the only thing that has become more expensive over the course of the war. Higher gasoline prices have also contributed to rising airline fares, while consumer goods such as groceries,. shoes have also gone up in cost amid global supply chain disruptions.
Even if oil. other core necessities – such as fertilizer – begin flowing from the Middle East again, experts warn that the sticker shock is likely to outlast the fighting.
“Product prices across the United States are projected to keep climbing for the rest of 2026,” Patrick Penfield. a professor of supply chain practice at Syracuse University, told the Associated Press on Thursday.
Penfield pointed to depleted inventories and ongoing supply chain consequences spanning from the war. He noted that farmers, for example, already had to pay higher costs for fertilizer. other supplies in the spring, which will “ripple through to increased food prices by autumn”. And at the gas pump. he noted that limited refinery capacity in the US “remains a significant bottleneck” towards bringing down prices.
The rising fuel costs have already pushed US inflation to its highest level in three years. And many consumers are still filling their tanks for much more than $4 a gallon.
That price is a national average, with costs varying between states due to factors such as proximity to supply. differing tax rates. In California on Thursday, regular gasoline averaged about $5.64 a gallon, according to AAA, followed by $5.57 in Hawaii. By contrast, prices in Indiana and Texas sat at about $3.40 and $3.49 a gallon.
Recent relief for fuel prices arrived with cooling costs for crude oil – the main ingredient in gasoline. Brent crude. the international standard, fell below $78 a barrel on Thursday, while US benchmark crude dropped to just over $74 a barrel. That’s still a little higher than the pre-Iran war level of roughly $70,. way below the $100-plus price seen a few weeks ago.
Major shipowners have reportedly begun moving vessels through the strait of Hormuz after Wednesday’s signing of the memorandum of understanding. according to maritime data from Lloyd’s List Intelligence – though some operators reported that only more limited side shipping routes were open.
On Thursday, US Central Command said in a statement that it has lifted its blockade on all maritime traffic entering. exiting Iranian ports and coastal areas in the strait of Hormuz.
“American forces are not impeding the transit of vessels to or from Iranian ports on the Arabian Gulf. Gulf of Oman,” it said.
Despite these developments, experts warn that it could take weeks or months for traffic to return to prewar levels.
The Associated Press contributed reporting
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