Gas prices have dipped following the announcement of a peace pact to end the war in Iran and reopen the Strait of Hormuz.
Consumers will find some relief when filling up a tank of gas, as prices at the pump are beginning to come down since the U.S.-Israel joint strikes against Iran began Feb. 28, when the national average price for a gallon of regular gasoline in the U.S. was $2.98.
That average has been falling for three straight weeks, according to the AAA motor club, and stands at $4.03.
But prices remain at four-year highs.
The most expensive week for gas in 2026 was May 21, when the national average hit $4.56, with AAA projecting record travel numbers for Memorial Day weekend.
Oil prices nonetheless remained near three-month lows, as markets priced in the likelihood of a deal and the supply relief it would bring.
Brent crude, the global benchmark, rose more than 1% to nearly $80 per barrel on Wednesday after President Trump prompted uncertainty over signing a ceasefire deal to end the largest oil supply disruption in history.
He said the text of the memorandum of understanding may not be final, and “if I don’t like it, if they don’t behave, we’ll go right back to dropping bombs right smack in the middle of their head because they misbehaved for 47 years.”
Wednesday’s dollar amount is a stark change from April, when crude oil prices dipped below $100 for the first time amid negotiations to reopen the strait, the vital waterway through which 20% of the world’s oil and gas is shipped. Brent had peaked at roughly $140 a barrel during the conflict — nearly double the $72 on Feb. 27, the day before the initial strikes began.
Wednesday’s price of around $80 marks a significant retreat from that peak, though it remains well above prewar levels.
The global oil market is on track for a massive supply surplus in 2027 after the strait is reopened and the U.S. lifts its naval blockade of Iran.
The International Energy Agency, which advises industrialized countries on energy, projected global oil supplies could rise by 8 million barrels a day, heavily outpacing a modest demand growth of just 2 million barrels a day.
The agency estimates that the war blocked more than 14 million barrels per day of Middle East oil output.
“If the deal holds, exports and production from the Gulf should see a gradual recovery — not least because Iranian oil exports can fully resume once the U.S. blockade is lifted,” the agency said in its monthly oil market report Wednesday.
