The average price of gasoline has fallen below $4 per gallon in half of U.S. states, just days after President Donald Trump announced a tentative peace agreement with the Islamic Republic of Iran.
In 25 states spanning the Southwest to the East Coast, gasoline prices have fallen below $4 per gallon as global oil prices drop to their lowest level since March, according to AAA.
“The decline came as oil prices moved sharply lower in reaction to news of a potential deal between the United States and Iran, though it remains to be seen whether the agreement will hold,” Patrick De Haan, head of petroleum analysis at GasBuddy, said. GasBuddy predicted prices could fall to around $3.75 by the Fourth of July if shipping traffic resumes through the Strait of Hormuz.
It’s a welcome relief for cash-strapped consumers and perhaps a turnaround for the White House, which has been racing to lower prices and ease the cost-of-living burden ahead of the crucial November elections.
At the national level, the average price of gasoline stands at $4.044, which is down from $4.517. Still, gas prices have remained elevated since the start of the war. At this time in 2025, the national average stood at $3.140, AAA reports.
In May, pain at the pump passed an ugly mark, with all 50 states reporting average gas prices at $4 or higher going into Memorial Day weekend.
Indiana now reports the lowest gas price in the nation at $3.36 per gallon, with Oklahoma, Texas, Tennessee, and other Southern states only slightly higher. Some East Coast states, including Maryland and Delaware, have dipped below the $4 threshold.
Out West, gas prices remain above the national average, with California leading at $5.71 per gallon, followed by Washington, Hawaii, and Alaska.
“Americans today will spend >$200 million less on gasoline than they did a month ago, but the cost is still $342 million more than one year ago. Americans will spend ~$1.51 billion today on gasoline,” De Haan wrote on social media.
Gas prices dropped, and stocks surged on news of a potential agreement between the United States and Iran.
“The Deal with the Islamic Republic of Iran is now complete. Congratulations to all! 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, adding, “Ships of the World, start your engines. Let the oil flow!”
A sustained decline in energy prices could also help ease inflation, which has ticked up over the last couple of months. May’s reading showed the hottest inflation rate in three years at 4.2%, The Daily Wire previously reported.
The proposed peace deal is set to become official on Friday, June 19, at a Swiss signing ceremony.
“I certainly plan to be there, but it’s possible the president himself could be there. We will figure it out, but what we know is that we have got a lot of work to do, but it is a very big win for the American people tonight,” Vice President J.D. Vance said.
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