The United States national average price for a gallon of regular gasoline has fallen below $4 for the first time since March 30, offering modest relief to American drivers amid an extended period of elevated fuel costs.
According to Antigua News Room, the national average dropped to $3.999 per gallon on Thursday, per data from AAA — a decline of nearly 3 cents from the previous day. Indiana recorded the cheapest average at $3.40, making it one of 28 states where the average price now sits below $4. Separate tracking service GasBuddy placed the early Thursday figure at approximately $3.98, having first dipped below the $4 threshold on Sunday.
The development coincides with the anticipated reopening of the Strait of Hormuz, following an official memorandum of understanding between Iran and the United States to end the war. The strait's closure in late February cut off roughly 20% of the world's oil supply, sending gas and oil prices sharply higher.
Prices at the pump have declined each day since peaking at $4.56 on May 21, as ongoing negotiations raised hopes of a resolution. However, experts caution that a return to the pre-war national average of $3 per gallon is unlikely in the near term.
Matt Smith, lead oil analyst at Kpler, told CNN it will likely take three to four months before tanker traffic through the strait returns to normal levels — and even longer to replenish the oil supplies lost during the months of conflict. Beyond the shipping disruption, much of the region's oil production and refining capacity effectively shut down when tankers were blocked, and some facilities sustained damage during the fighting.
Crude oil also operates as a global market. Even though relatively little Middle Eastern oil is destined for the United States — the world's largest oil producer — the region's output still shapes what American consumers and businesses pay at the pump. Long-term oil prices, the primary driver of retail gas costs, show no signs of falling back below the pre-war level of $70 per barrel before the next decade.
Retail prices are also expected to fall more slowly than they rose. Many gas station owners absorbed losses by holding prices down as wholesale costs climbed, and some may now seek to recover those margins.
"There's an old expression — gas prices go up like a rocket and come down like a feather," said Tom Kloza, an independent oil analyst and advisor to major oil company Gulf Oil.
That dynamic helps explain why the average retail price has declined by only about 2 cents per day since its peak — a stark contrast to the more than $1 price increase recorded during the first month of the war, the largest single-month jump this century.
While excess oil inventories and releases from emergency reserves around the world prevented prices from rising even further, those inventories now sit at their lowest levels in decades. Some experts warn that pump prices could climb well above $4 again later this summer as the driving season intensifies.
"We'll figure out what the new normal is," said Dan Pickering, founder and chief investment officer at Pickering Energy Partners. "But it isn't going to be $2.85 gasoline."
CNN's David Goldman contributed to the original report.
