The average price of a gallon of gas in the United States has fallen below $4 for the first time since March 30, according to AAA, after the U.S. and Iran signed a preliminary agreement to end their war.
Gas prices have fallen for nearly four straight weeks, just in time for the summer driving season. The average price of gas had climbed from $2.98 a gallon before the war started to as high as $4.56, driven by the closure of the Strait of Hormuz, which carried around 25% of the world’s seaborne oil trade before the war.
President Trump hailed the falling gas prices at the G7 summit in France on Wednesday, telling reporters that “we’re hitting in the threes now for gasoline, and that’ll come down a lot lower.”
It’s not clear, though, how quickly oil and gas prices may fall. Analyst Matt Wright of Kpler, a trade analytics company based in Brussels, wrote in a recent blog post that the number of tankers entering the Persian Gulf could rise to 12 a day — around half of pre-war levels — in 30 days. Oil and gas companies are expected to act with caution due to the lingering uncertainty over the agreement, suggesting that prices may fall slowly in the coming months.