US fuel prices fall below $4 as oil markets react to Iran deal

New York: Average gasoline prices in the United States have dipped below 4 per gallon for the first time since March, reflecting a shift in global oil markets following the recent U.S.–Iran agreement.According to data from the American Automobile Association (AAA), the national average price for regular petrol fell to 3.999 per gallon.Impact of geopolitical developmentsThe decline follows a deal signed by U.S. President Donald Trump aimed at easing tensions with Iran. The agreement includes provisions for Tehran to dilute its stockpile of enriched uranium and introduces waivers on certain sanctions tied to oil exports.The development has raised expectations of increased oil supply, putting downward pressure on prices.Regional price differencesDespite the national average, fuel prices continue to vary widely across the country. In California, prices remain significantly higher at an average of 5.64 per gallon, while prices are lower in states such as South Carolina, where they average 3.58.Delayed market effectsAnalysts caution that while prices are beginning to fall, the full impact of improved supply conditions may take time to materialise.The Strait of Hormuz, a key global shipping route that previously handled around one-fifth of the world’s crude oil, has seen disruptions during the conflict. It may take weeks or months for shipping operations to fully normalise and for oil flows to stabilise.In addition, refineries typically purchase crude oil weeks in advance, meaning current fuel production may still reflect earlier, higher prices.Broader economic impactThe disruption in the Middle East has affected supply chains beyond energy, including sectors such as fertilisers, food production and manufacturing, contributing to higher costs that may persist in the near term.While the drop below 4 is seen as a positive signal for consumers, market uncertainty remains. Energy analysts expect continued volatility as geopolitical developments evolve and supply chains gradually recover.The coming weeks will be key in determining whether the downward trend in fuel prices can be sustained.