U.S. gasoline prices dropped below $4 per gallon for the first time since March as expectations of increased oil exports through the Strait of Hormuz eased concerns about global energy supplies.

Key Highlights

  • The national average gasoline price fell to $3.99 per gallon, the lowest level since March 30.
  • Gasoline prices have declined for 28 consecutive days after reaching a peak of $4.56 per gallon in May.
  • The U.S.-Iran agreement is expected to gradually restore oil exports through the Strait of Hormuz.
  • Fuel prices remain roughly 30% above levels recorded before the conflict began in late February.
  • The Strait of Hormuz handled about one-fifth of global oil supplies before the disruption.

U.S. gasoline prices fell below $4 per gallon on Thursday for the first time in nearly three months as traders responded to expectations that oil exports through the Strait of Hormuz will gradually recover following the U.S.-Iran peace agreement.

According to AAA data, the national average price for regular gasoline declined to $3.99 per gallon. The move extended a prolonged retreat in fuel costs that began after prices reached approximately $4.56 per gallon on May 21.

The latest decline marks 28 consecutive days of falling gasoline prices, the longest uninterrupted stretch of decreases since late 2023. The trend has been driven largely by easing concerns about severe supply disruptions in global energy markets.

President Donald Trump signed an agreement with Iranian President Masoud Pezeshkian this week aimed at ending months of conflict and reopening the Strait of Hormuz, one of the world's most important energy transit routes. The deal has improved market expectations that crude oil shipments will gradually resume through the strategic waterway.

Before the conflict, roughly 20% of global oil supplies moved through the Strait of Hormuz. The closure of the route earlier this year triggered an unprecedented disruption in global oil flows and sent energy prices sharply higher across international markets.

Investors had anticipated the possibility of a diplomatic breakthrough for several weeks, helping prevent oil prices from rising even further. In addition, naval escorts and security operations in the region have supported limited tanker movements while negotiations were underway.

Despite the recent improvement, fuel costs remain significantly above pre-conflict levels. Drivers are still paying roughly 30% more at the pump compared with prices seen before military operations involving Iran began in late February.

Analysts caution that the recovery in oil flows is likely to be gradual rather than immediate. While tankers have started moving through Hormuz again, shipping volumes remain well below levels recorded before the conflict, and many operators continue to monitor security conditions before fully resuming activity.

The direction of gasoline prices over the coming weeks will depend heavily on how quickly crude exports normalize and whether confidence returns to shipping markets. A sustained increase in oil flows through Hormuz could provide additional relief for consumers, though fuel prices remain vulnerable to geopolitical developments and supply chain disruptions.