US Gas Prices Dip Below $4 for First Time Since Iran War Began
The average US price for a gallon of gas fell below $4 on Thursday, marking a significant drop in energy prices since the Iran war began.
According to motor club AAA, a gallon of regular gasoline averaged $3.999 on Thursday, the first time since late March that prices were that low.
The drop in gas prices is attributed to the tentative peace deal between the US and Iran and the resumption of oil shipments through the Strait of Hormuz.
Although the cost of gas is still much higher than before the war began on February 28, the current average price is a welcome relief to consumers who have been struggling with soaring costs.
Impact on Consumers
Even with prices dropping, American drivers are collectively paying about $1 more per gallon than they were before the war, and gas is 25% more expensive than it was this time last year.
Research has shown that short-term swings in the cost of gas lead consumers to adjust their driving and wider spending, with some even pulling back on core necessities such as groceries when gas prices get high.
Experts warn that the high costs will likely persist long after the fighting ends, and product prices across the United States are projected to keep climbing for the rest of 2026.
Regional Variations
The national average gas price is a reflection of regional variations, with costs varying between states due to factors like proximity to supply and differing tax rates.
In California, the average price for regular gas was about $5.64 on Thursday, while in Hawaii, it was $5.57.
Meanwhile, prices in Indiana and Texas sat at about $3.40 and $3.49 a gallon, respectively.
Experts point out that limited refinery capacity in the US remains a significant bottleneck toward bringing down prices further.
What to Expect
As the US and Iran work towards a permanent end to hostilities, experts warn that it could take weeks or months for traffic to return to prewar levels.
Some ship captains may take their time to determine if the passage is safe, and refineries will need time to process cheaper products after oil prices drop.
Energy shocks have been even starker in places that rely more heavily on imports from the Middle East — notably countries across Asia and Africa.