Gas prices in the United States fell below $4 per gallon for the first time since March, offering relief to consumers after more than three months of elevated prices caused by the Iran war [1]. According to AAA data tracked by NBC News, the average price per gallon dropped to $3.999 as of Friday morning, down sharply from this year’s peak of $4.56 [1]. Despite this decline, gas prices remain over 34% higher than before the U.S. and Israel launched the war on February 28 [1].
The decrease in retail gas prices is attributed to a 14% plunge in oil prices over the past five days, driven by increased market optimism regarding peace with Iran [1]. On Thursday, U.S. crude oil traded at approximately $75 per barrel, and international Brent crude oil was around $79 per barrel, both at their lowest levels since the conflict began [1]. However, oil prices are still more than 30% higher than pre-war levels [1].
Experts remain cautious about further price declines, citing critically low backup supplies in commercial and government stockpiles that have helped mitigate higher prices so far [1]. The commercial oil hub in Cushing, Oklahoma, reached an “operational stress” level on Thursday, and the U.S. Strategic Petroleum Reserve fell to its lowest level since 1983 on Monday [1].
While the U.S. and Iran have signed and published a memorandum of understanding to halt the war, a comprehensive agreement depends on a 60-day negotiating period [1]. The Strait of Hormuz, a key passage for over 20% of the world’s energy supplies, remains effectively shut [1]. Chevron CEO Mike Wirth commented that the ability of current measures to mitigate risk may not last much longer, suggesting that the situation could change in the July or August timeframe [1].
CONCLUSION
The recent drop in U.S. gas prices reflects easing oil markets amid hopes for peace with Iran, but critically low reserves and ongoing supply risks suggest continued volatility. Market participants and experts remain cautious, with key infrastructure and geopolitical factors still unresolved.