The national average price for regular gasoline dipped below $4 a gallon on Tuesday to reach $3.98 according to data from AAA.
Pump prices fell under that threshold for the first time since July. The decline provides relief to motorists after months of high fuel costs driven by the war in Iran.
Brent crude fell below $90 a barrel following a 13% plunge the previous week. That drop was the steepest one-week decline since the pandemic shutdown in April 2020, as the New York Post reported.
BREAKING: US average retail gasoline price drops below $4 a gallon (to $3.9788) for the first time in 114 days. Despite the fall in prices, the average cost is still up ~30% from pre-war levels (but that's a lot better than a peak of ~53% increase set in May).
President Trump said that the military conflict with Iran is effectively over. He indicated that the U.S. has no plans to renew strikes.
Market analysts said lower oil prices stem from increased tanker traffic through the Strait of Hormuz. Optimism that the recent U.S. midterm elections would pressure the administration to pursue a diplomatic resolution in the Middle East also helped.
US gasoline retail prices have a LOT of space to fall. Yes, rockets and feathers. Yet, judging by the very slow drop in retail prices vs the plunge in wholesale costs, the feather must be from a tiny hummingbird. Don't be surprised if the White House starts to apply pressure.
Filling stations typically switch from summer-blend fuels to cheaper winter blends. Cooler weather also reduces overall travel demand.
“We’re heading in the right direction in terms of what drivers want to see,” said AAA spokesperson Aixa Diaz, telling CBS News.
Inflation-scarred consumers face a cost of living that remains high.
Diesel costs stood at $6.16 a gallon nationally. That price is down from $6.53 in late September, according to AAA.
Elevated diesel prices affect freight and transport expenses. “You’re starting to see higher freight costs get passed through,” said economist Mike Reid of RBC Capital Markets.
Patrick De Haan, a petroleum expert at GasBuddy, said the national average could reach $3.75 a gallon by Thanksgiving.
the days of $4/gal gas nationally may be behind us for the time being… GasBuddy data showing $3.95/gal this morning, we could head toward $3.75/gal around Thanksgiving. 2026 has tallied 182 days over $4, compared to 157 days in 2022 and 47 days in 2008.
Will geopolitical stability hold long enough for prices to reach $3.75 by Thanksgiving?
🚨🇺🇸 Gas was above $4 before the midterms. One week later, it’s suddenly below $4. What changed?? One week before the midterms, regular gas averaged about $4.27 nationwide. On Election Day, Americans were still paying roughly $4.15, the highest nominal Election Day price on… pic.twitter.com/TTb81dSrE2