Average U.S. gasoline prices dipped below $4 per gallon on Thursday for the first time since March, following a sharp decline in oil prices linked to a new agreement between the United States and Iran.
According to AAA, the national average price for regular gasoline fell to $3.99 per gallon. The drop came after President Donald Trump signed a deal with Iran that requires Tehran to dilute its stockpile of highly enriched uranium while easing U.S.-backed sanctions on the country.
Gas prices, however, continue to vary widely across the United States.
Drivers in California are paying an average of $5.64 per gallon, while motorists in South Carolina are seeing prices closer to $3.58 per gallon.
The U.S.-Iran agreement is intended to establish a permanent ceasefire and launches a 60-day negotiation period aimed at reaching a broader accord on Iran’s nuclear program. While the deal offers Iran several immediate benefits, critics argue it secures relatively few concessions in return. President Trump also left open the possibility of resuming military action if talks fail.
Meanwhile, oil markets have responded strongly.
U.S. crude prices have fallen 14% this month, with benchmark crude dropping to around $80 per barrel. That is down from more than $120 per barrel during the height of the conflict, though still above the roughly $67 per barrel level seen before the war.
Despite the decline in oil prices, consumers may not see significant relief at the pump immediately. Analysts warn it could take weeks or even months for oil shipments through the Strait of Hormuz to return to normal levels.
Before the conflict, the strategic waterway handled roughly 20% of the world’s crude oil supply. Hundreds of vessels remain backed up in the Persian Gulf, and Gulf producers that reduced output during the crisis will need time to restore production and transportation networks. Shipping companies are also expected to proceed cautiously until they are confident the threat of renewed attacks has subsided.
In addition, refineries typically purchase crude oil weeks in advance. As a result, lower oil prices often take time to work their way through the supply chain before translating into lower gasoline prices for consumers.
