U.S. average retail gasoline prices fell below $4 per gallon for the first time since mid-April, driven by growing optimism that a preliminary agreement between the United States and Iran could restore normal oil flows through the Strait of Hormuz.
The decline followed a sharp drop in crude oil prices on Monday after U.S. President Donald Trump announced that Washington and Tehran had signed a memorandum of understanding aimed at ending a nearly four-month conflict.
Lower fuel prices could provide relief to American consumers and support the Trump administration’s efforts to curb energy costs ahead of November’s midterm elections, where Republicans are seeking to retain narrow congressional majorities.
Analysts said the reopening of the Strait of Hormuz, a key route for global oil shipments, remains critical to sustaining the recent decline in fuel prices.
While Trump said the waterway would be fully reopened following a formal signing ceremony on Friday, industry experts cautioned that normal shipping operations could take weeks to resume due to the complexity of clearing mines from the area.
According to GasBuddy, the U.S. national average gasoline price slipped to $3.997 per gallon on Sunday, marking the first break below the $4 threshold in two months.
The American Automobile Association reported the national average at $4.065 per gallon on Monday, indicating continued volatility in retail fuel markets.
Patrick De Haan, head of petroleum analysis at GasBuddy, said the durability of lower prices will depend on the successful reopening of the Strait of Hormuz and continued progress in U.S.-Iran relations.
Despite the recent decline, gasoline prices remain about 91 cents higher than a year ago, reflecting the broader impact of the conflict on energy markets.
Americans have collectively spent an estimated $46 billion more on gasoline since the start of the war, underscoring the economic burden of elevated fuel costs.