Gas prices fall below $4 a gallon, GasBuddy says
Gas prices fell below $4 per gallon on Monday, GasBuddy said, crossing the milestone as oil costs eased in response to an agreement between the United States and Iran.
The national average price of a gallon of gas stands at $3.99, marking a decline of more than 9 cents over the past week, according to a GasBuddy post on X. Gas prices, however, continue to register well above where they stood before the Iran war.
An ongoing global oil shortage threatens to rekindle price increases, especially in the event of renewed tensions in the Middle East, some analysts told ABC News.
Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston, voiced uncertainty about the staying power of the potential relief.
"I think you should be very, very skeptical," Krishanamoorti said. "Any global challenge is likely to put significant upward pressure on gasoline prices in the U.S."
A similar sentiment came from Patrick De Haan, a petroleum analyst at GasBuddy, who said a drop below $4 a gallon would happen "soon."
"Permanent?" De Haan posted on X. "Too early to tell."
Gas prices stood below $4 as recently as late March. Before topping $4 a gallon on March 31, the national average gas price had stayed below $4 for nearly four years.
The Middle East conflict prompted the Iranian closure of the Strait of Hormuz, a maritime trading route that facilitates the transport of about one-fifth of global oil supply. The standoff triggered one of the largest oil shocks ever recorded, sending gasoline prices higher.
Oil prices began to fall in mid-May, however, as Iran and the U.S. appeared willing to strike an agreement that would reopen the strait.
President Donald Trump said in a Sunday social media post that the U.S. and Iran had reached a deal that will open up the strait.
"I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade," Trump wrote.
"Ships of the World, start your engines. Let the oil flow!" he added.
Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed the deal had been finalized and said it would be signed in Switzerland on Friday.
On Friday, U.S. oil prices fell to about $84 a barrel, marking a drop of about 20% since a recent peak on May 19.
Crude oil is the main ingredient in auto fuel, accounting for more than half of the price paid at the pump, according to the federal U.S. Energy Information Administration.
The U.S. is a net exporter of petroleum, meaning the country produces more oil than it consumes. But since oil prices are set on a global market, U.S. prices move in response to swings in worldwide supply and demand.
Still, oil prices have proven volatile over the course of the Iran war, some analysts noted.
Timothy Fitzgerald, a professor of business economics at the University of Tennessee who studies the petroleum industry, said the price of oil -- and, in turn, gasoline -- could instead rise over the coming days if tensions ratchet up in the Middle East.
"The oil market is looking for evidence of a resolution -- not just green shoots or hopes," Fitzgerald said.
Gas prices usually fall at a slower pace than they rise, since retailers prefer to keep prices elevated as they sell through inventory acquired at high cost, some analysts said.
"I'd expect the distribution system to be conservative in terms of how that drop in oil prices gets passed through," Fitzgerald said. "It may get passed through eventually."
