AAA’s national average for a gallon of regular gasoline eased to $3.928 on Wednesday, holding below $4 as crude oil trades at pre-war lows. Diesel slipped back below $5 for the first time in months, to a national average of $4.980 — a milestone for the freight and agriculture sectors that have borne the brunt of the war’s wide distillate premium.
The relief tracks a dramatic collapse in crude. WTI fell below $70 a barrel and Brent below $74 on Wednesday, the lowest since before the conflict began in late February and down roughly 40% from the wartime peak. Because retail gasoline lags the futures market by one to two weeks, much of that recent decline has yet to reach the pump, pointing to further easing through the heart of the summer driving season.
State-level prices continue to span a wide range. Indiana is the cheapest market in the country at $3.33 a gallon, with Texas ($3.38), Oklahoma ($3.43), Tennessee ($3.47), and Mississippi ($3.52) also among the lowest. California remains the most expensive at $5.54, followed by Washington ($5.30), Hawaii ($5.54), and Oregon ($4.80). The gap reflects the usual mix of state taxes, fuel-blend requirements, and refining and distribution costs.
The outlook points lower so long as the crude collapse holds. With the Strait of Hormuz seeing increased tanker traffic and the IEA estimating the UAE is back to nearly 85% of pre-war exports, the supply picture has loosened considerably. A move in the national average toward and below the year-ago level near $3.22 is plausible if oil stabilizes at current pre-war prices.
The risks run the other way only if the fragile peace frays. Iran’s renewed closure signal at the Strait of Hormuz, lingering disputes over the 60-day roadmap, and the possibility of renewed strikes all remain live — the kind of events that have repeatedly snapped prices higher over the past four months. For now, though, drivers are seeing the clearest and most sustained relief since the war began.
Continuing coverage: Gas Prices by State · Oil Prices · Geopolitics.