Daijiworld Media Network – Washington
Washington, Jun 18: Average gasoline prices in the United States fell below the $4-per-gallon mark on Thursday for the first time since March, following a decline in global oil market concerns after President Donald Trump signed a new agreement with Iran aimed at easing tensions in the region.
According to the American Automobile Association (AAA), the national average price for a gallon of regular gasoline stood at $3.999 on Thursday, marking a symbolic milestone after months of elevated fuel costs.
The overnight decline in fuel prices came after the United States and Iran signed an agreement that calls for Tehran to dilute its stockpile of highly enriched uranium and includes the lifting of certain US-backed sanctions. The agreement also seeks a permanent end to hostilities and initiates a 60-day negotiation period to reach a broader settlement on Iran’s nuclear programme.
Despite the nationwide average dropping below $4, fuel prices continue to vary significantly across the country. California recorded the highest average price at $5.64 per gallon, while South Carolina reported one of the lowest averages at $3.58 per gallon.
Analysts, however, cautioned that the full impact of the agreement on global energy markets may take time to materialise.
The recent conflict around the Strait of Hormuz disrupted the movement of crude oil and refined petroleum products through one of the world's most important energy corridors. Before the conflict, the strategic waterway carried nearly one-fifth of global crude oil supplies.
Industry experts said it could take weeks or even months before oil flows through the Strait of Hormuz return to normal levels. Hundreds of vessels remain stranded or delayed in the Persian Gulf, while Gulf oil producers are gradually restoring production that had been curtailed during the period of heightened tensions.
Shipping companies are also expected to proceed cautiously until confidence is restored that the risk of further attacks in the region has diminished.
In addition, fuel prices at retail stations are unlikely to decline immediately because refineries typically purchase crude oil several weeks in advance. As a result, cheaper crude prices often take time to translate into lower prices for consumers.
Beyond the energy sector, disruptions linked to the Strait of Hormuz have also affected supply chains for fertilisers, food products and consumer goods, including footwear. Businesses have warned that higher transportation and production costs may persist for some time, potentially affecting prices across multiple sectors.
While the drop in gasoline prices offers some relief to American motorists, economists say the pace of future declines will depend on the stability of the US-Iran agreement and the speed at which global energy supply chains return to normal operations.