The national average price for a gallon of regular gasoline in the United States fell to $3.99 on Thursday, dropping below $4 for the first time in nearly three months, according to AAA data cited by CBS News.
The decline offers some relief for drivers after a sharp run-up tied to the war in Iran and disruptions in global oil markets. Prices remain more than a dollar higher than when the war began, but they have retreated in recent weeks as crude prices fell on expectations of a preliminary U.S.-Iran deal to end the conflict.
A key oil route begins moving again
A memorandum of understanding between the United States and Iran reopened the Strait of Hormuz, the critical passage that normally carries about one-fifth of the world’s oil supply. The strait had been virtually closed since the war began on Feb. 28, a disruption that helped push oil and gasoline prices higher.
More ships began moving through the waterway after the agreement was formally signed Wednesday, with at least 10 commercial vessels crossing the strait, CBS News reported.
Oil benchmarks also moved lower Thursday. Brent crude, the international standard, fell 1.4% to $78.46 a barrel, while West Texas Intermediate, the U.S. benchmark, dropped 2.2% to $75.10 a barrel.
Further declines depend on what holds
Patrick De Haan, a petroleum analyst at GasBuddy, said this week that the national gas average could continue to fall “provided there isn’t a drastic reversal and the U.S. and Iran continue moving in a positive direction.”
De Haan estimated that regular gasoline could fall below $3 a gallon by the end of this year or in early 2027, depending on developments in the Middle East. He also said the timeline could improve if Iran is allowed to sell oil on global markets again, which could help rebuild global oil inventories.
For now, the immediate question for drivers is whether the reopening of the Strait of Hormuz and the tentative diplomatic progress continue to ease pressure on oil markets.
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