AAA’s national average for a gallon of regular gasoline fell to $4.161 on Tuesday, with the motor club’s own headline declaring that the national average has dropped nearly 20 cents in one week. The accelerating pullback extends what is now the third week of declines, as crude oil holds below $100 per barrel and May’s steep slide continues working through the wholesale-to-retail lag.
The relief arrived despite a violent weekend in the crude market. WTI spiked to $95 early Monday after Iran and Israel exchanged strikes, before the two countries agreed Tuesday to halt attacks — sending crude back below $90. Because pump prices lag the futures market by one to two weeks, the brief spike never reached drivers; the de-escalation means it likely never will, and Tuesday’s crude retreat points the pump trajectory lower still.
The EIA’s June Short-Term Energy Outlook, released Tuesday, put an official frame around the fuel-price arc. The agency sees the largest price impacts landing in the second quarter of 2026 — the current quarter — due to the de facto closure of the Strait of Hormuz, with diesel and jet fuel bearing the brunt. Wholesale gasoline is forecast to average $2.98 per gallon for 2026, nearly $1.00 above the agency’s February outlook, before easing to $2.61 in 2027 as supply normalizes.
Translated to the pump, the outlook suggests the spring’s four-year highs were the peak of this cycle if the diplomatic track holds. Fitch Ratings reinforced that view this week, projecting the strait could reopen around the end of July and warning of a possible oversupply by the fourth quarter of 2026 — an environment that would pull retail prices down meaningfully from current levels, though the agency cautioned the reopening timing remains highly uncertain.
State-level spreads remain wide. Indiana is the cheapest market in the country at $3.41 per gallon and California the most expensive at $5.87, with Texas near $3.62 and the West Coast broadly above $5. The $2.45 gap between the cheapest and priciest markets reflects the usual mix of taxes, fuel-blend requirements, and refining and distribution costs.
The caveat is the same one that has shadowed every week of this conflict: the relief depends on the de-escalation holding. Iran has warned its operations could resume if Israel continues its campaign in Lebanon, and the strait remains closed under the dual blockade. For now, though, drivers are getting their fastest price relief since the war began — nearly 20 cents in a week — just as the summer driving season ramps up.
Continuing coverage: Gas Prices by State · Oil Prices · Geopolitics.