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NEW YORK, June 15 (Reuters) – U.S. average retail gasoline prices dipped below $4 a gallon for the first time since mid-April, as optimism grew that a preliminary deal between the U.S. and Iran would lead to the reopening of the Strait of Hormuz, a critical passageway for global oil supplies.
Prices for crude oil fell more than $4 a barrel on Monday after U.S. President Donald Trump announced that the U.S. and Iran had signed a peace deal to end the nearly four-month war.
The decline in fuel prices could offer some relief to the Trump administration, which promised to lower energy prices for consumers, as breaching the $ 4-a-gallon threshold is largely viewed as a psychological barrier at which point some consumers begin changing their behavior, such as cutting back on fuel consumption.
Trump said the text of the deal would be released after a formal signing ceremony on Friday, when he also said the Strait of Hormuz would be fully reopened. However, experts say it could still take time for the shipping traffic to return to normal as removing mines from the waterway is a complex process.
“The real test now shifts to the Strait of Hormuz, where any reopening and resumption of normal oil flows would be the clearest signal that this relief is durable,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “For now, the national average could continue falling, provided there isn’t a drastic reversal and the U.S. and Iran continue moving in a positive direction.”
U.S. national average retail gasoline prices dipped to $3.997 a gallon on Sunday, falling below the $4 mark for the first time since mid-April, according to GasBuddy data.
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