Gas prices drop below $4 a gallon for the first time in months

The average cost of a gallon of gas nationwide has dropped below $4 for the first time since March.

Daily data released by AAA on Thursday showed that across the US, the average gas price is now $3.99 per gallon.

In California, where gas prices are generally highest, the average price per gallon was $5.64 on Thursday, while the cheapest state was Indiana, where the average price per gallon was $3.39.

Gas prices jumped from less than $3 in February after the start of the US-Iran war, reaching a peak of more than $4.50 in late May.

The war crippled global oil supply by leading to the closure of the Strait of Hormuz, a critical Iran-controlled waterway through which about 20% of the world’s oil and liquefied natural gas flows.

This, in turn, pushed crude prices sharply higher.

Oil prices have moved in lockstep with escalations and de-escalations in the conflict, jumping on major military actions and falling when an end to the war seems close.

Prices tumbled this week after the US and Iran agreed to a deal to end the war, with Brent crude, the global benchmark, dropping to under $78 per barrel on Thursday following news that the US and Iran had signed a memorandum of understanding.

It reached a high of nearly $120 per barrel in late March.

Pakistan’s Prime Minister, Shehbaz Sharif, who has been a key mediator of the deal, said in an X post on Thursday that “Iran will instantly reopen the Strait of Hormuz and the United States of America will immediately lift the naval blockade.” While the price of fuel has dropped more than 50 cents per gallon since its peak, gas is still a third more costly than it was before the conflict began.

In late February, the average cost per gallon was around $2.98.