The average price of gas in the United States was $3.99 on Thursday, falling under $4 for the first time since March, after the U.S. and Iran signed an initial agreement to end the war in Iran.
The memorandum of understanding signed by President Donald Trump and Iranian President Masoud Pezeshkian lays out terms to begin opening the Strait of Hormuz to commercial vessels and for the U.S. blockade of Iranian ports to be lifted. Future arrangements that could govern passage through the strait remain subject to negotiation.
The narrow waterway that once carried about one fifth of the world’s oil and gas supplies has been effectively blocked to maritime traffic during the nearly four-month war, which has spiked energy prices and led to inflationary pressures and shortages around the world.
Those pressures drove U.S. gas prices to $4 a gallon March 31, the highest level since Russia’s invasion of Ukraine. On Thursday, a gallon of regular gas fell to $3.99, marking the third straight week of prices falling, according to AAA — though they remain higher than the $3.18 average one year ago.
The price of Brent crude oil, the international benchmark, also dropped to $76 per barrel early Thursday, well below the four-year high of $126 per barrel reached in late April but still above the $69 a barrel it was trading at before the war began.
Experts have warned it will take time for normal shipping through the strait to resume. The narrow waterway is littered with mines, and the hundreds of vessels stranded by the war could take weeks to clear.
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