US Gas Prices Fall Below $4 Per Gallon After Iran Deal

The average price of gasoline in the United States dropped below $4 per gallon on Thursday for the first time since March, offering some relief to drivers after months of elevated fuel costs.

According to AAA, the national average for a gallon of regular gasoline fell to $3.999. The decline came shortly after President Donald Trump signed an agreement with Iran that eases sanctions and seeks to end hostilities between the two countries, helping calm global oil markets.

Iran Deal Helps Lower Oil Prices

The agreement requires Iran to dilute its stockpile of highly enriched uranium and begins a 60-day negotiation period aimed at reaching a broader agreement over Tehran’s nuclear program.

The announcement contributed to a sharp decline in oil prices. U.S. benchmark crude oil has fallen roughly 15% this month, helping reduce pressure on fuel costs nationwide.

Oil prices dropped to around $80 per barrel this week. Before the conflict involving Iran, crude traded near $67 per barrel, while prices surged above $120 during the height of the war.

Lower oil prices generally translate into cheaper gasoline, although the impact at the pump often takes time to reach consumers.

Gas Prices Vary Across the United States

Despite the national average dipping below $4, fuel prices remain significantly different from state to state.

California continues to record the highest average gasoline prices in the country at approximately $5.64 per gallon. Meanwhile, South Carolina drivers are paying around $3.58 per gallon on average.

Regional taxes, refining capacity, transportation costs and environmental regulations continue to influence local fuel prices.

Why Fuel Costs May Stay Elevated

Although gasoline prices have started to decline, analysts caution that consumers should not expect immediate or dramatic reductions.

The Strait of Hormuz, one of the world’s most important energy shipping routes, remains partially disrupted after months of conflict. Before the war, the narrow waterway handled roughly one-fifth of global crude oil shipments.

Hundreds of vessels remain stranded or delayed in the Persian Gulf. Oil producers in the region also need time to restore normal production levels after reducing output during the conflict.

Shipping companies and vessel operators remain cautious as they assess whether conditions in the region are stable enough for normal transit operations to resume.

Supply Chain Effects Continue

The impact of the conflict extended beyond oil markets. Disruptions in the Strait of Hormuz affected global supply chains for products including fertilizer, food and manufactured goods.

Businesses are still dealing with higher transportation and logistics expenses, costs that may continue to be passed on to consumers even as energy prices begin to ease.

Another factor limiting immediate gasoline savings is that refineries often purchase crude oil weeks in advance. As a result, lower oil prices typically take time to work their way through the refining process and appear at retail gas stations.

Gas Prices Still Higher Than Last Year

While the decline below $4 per gallon marks an important milestone, fuel prices remain substantially higher than they were a year ago.

The current national average is approximately 25% above levels recorded during the same period in 2025, reflecting the lasting effects of geopolitical tensions and disruptions in global energy markets.

For now, drivers are seeing modest relief, but energy analysts say the pace of future declines will depend on the stability of the Iran agreement and the recovery of oil shipments through the Strait of Hormuz.