AAA’s national average for a gallon of regular gasoline fell to $4.426 Thursday, down 12 cents from a week earlier, as crude oil prices retreated on reports of progress in U.S.-Iran peace talks. It is the first sustained pullback at the pump since the conflict began February 28, though prices remain the highest they have been in four years and roughly 50% above the pre-conflict baseline.
AAA tempered the relief with a caution: the fragile situation could cause oil prices to spike again if a ceasefire deal isn’t reached, and pump prices will likely remain elevated as the busy summer driving season gets underway. That warning proved timely — renewed U.S.-Iran hostilities Thursday, including a U.S. strike on a military site near Bandar Abbas and an IRGC claim of a retaliatory airbase attack, sent Brent rebounding toward $96–$97 after midweek losses.
The crude pullback that drove pump prices lower has been substantial. Oil has fallen more than 10% since May 18, when President Trump said he called off an imminent wave of strikes to allow more time for negotiations. WTI traded around $93 Thursday; Brent, which had touched five-week lows earlier in the week, recovered some ground on the renewed hostilities. The net direction for the week remains sharply lower even after Thursday’s rebound.
The U.S. Energy Information Administration reported Thursday that commercial crude oil inventories fell 3.3 million barrels in the week ending May 22 to 441.7 million barrels, about 2% below the five-year average for this time of year. The draw was slightly smaller than the roughly 4.1 million-barrel decline analysts had expected. Refinery inputs rose 652,000 barrels per day, with utilization climbing to 94.5% as refiners ramped for summer demand. Total motor gasoline inventories fell 2.6 million barrels and sit about 6% below the five-year average.
Cushing, Oklahoma — the delivery point for WTI futures — saw stocks fall 2.8 million barrels to 23.0 million. The continued drawdown reflects the structural undersupply created by the Persian Gulf disruption: even with crude prices retreating on diplomatic optimism, the physical market remains tight because Hormuz traffic has not resumed. The national average retail diesel price eased to roughly $5.52 per gallon, about $2.04 above the year-ago level.
State-level prices continue to span a wide range. California remains the most expensive market in the country, while Oklahoma and Mississippi remain among the cheapest. The wholesale-to-retail transmission lag of one to two weeks means that if crude holds at current levels or falls further, pump prices could continue easing into early June — but a breakdown in the MOU talks or a sharper military escalation would reverse that quickly.
Continuing coverage: Gas Prices by State · Oil Prices · Geopolitics.