Gas Prices Drop Below $4 After US-Iran Deal Reopens Strait of Hormuz
American motorists are getting relief as gas prices drop below $4 per gallon for the first time since March 30 following a U.S.-Iran deal to reopen the Strait of Hormuz.
The American Automobile Association reported Thursday that the national average price dropped to $3.999 per gallon, representing a decline of nearly 3 cents from the day prior. This milestone marks the first time gas prices have fallen below the $4 threshold since March 30.
The price relief comes on the heels of a breakthrough diplomatic agreement between the United States and Iran that will reopen the Strait of Hormuz, a vital waterway whose closure had strangled global oil supplies and sent pump prices soaring.
Trump Signs Deal to End Energy Crisis
President Trump signed the memorandum of understanding with Iran on Wednesday during a dinner at the Palace of Versailles in France. The agreement aims to end the conflict that has disrupted international petroleum markets for months.
Iran’s decision to close the strategic shipping route in late February had immediately cut off approximately 20 percent of the world’s oil supply, triggering sharp increases in both crude oil and gasoline prices across the United States and beyond.
Relief for 28 States
GasBuddy tracked the national average at roughly $3.98 early Thursday after prices first crossed below the $4 mark on Sunday. Indiana now boasts the nation’s lowest statewide average at $3.40 per gallon, joining 27 other states where drivers are paying less than $4 at the pump.
Gas prices had climbed above $4 nationwide in late March following Iran’s effective blockade of the strait. The national average reached its peak at $4.56 per gallon on May 21 before beginning a sustained decline as expectations mounted that diplomatic negotiations would successfully reopen the waterway.
Billions in Extra Costs
Patrick De Haan, GasBuddy’s head of petroleum analysis, revealed earlier this week that Americans have collectively spent approximately $46 billion more on gasoline since the conflict began, as New York Post reports citing Reuters.
The reopening of the Strait of Hormuz under the new agreement is expected to restore normal oil shipping operations and further stabilize energy prices in the coming weeks.
With information from New York Post
