AAA’s national average for a gallon of regular gasoline slipped to $3.867, extending a steady decline that has delivered meaningful relief to drivers at the start of the peak summer travel season. The pullback tracks the collapse in crude oil, which has fallen to pre-war levels as Gulf supply returns and the Strait of Hormuz reopens.

The relationship is direct: crude accounts for roughly 55 to 60% of the retail price of gasoline. With Brent down to around $72 a barrel — its lowest since February 27 — and WTI trading in the high-$60s, the wholesale cost of fuel has dropped sharply. Because retail prices lag the futures market by one to two weeks, more of that decline has yet to reach the pump, pointing to further easing in the days ahead.

State-level prices continue to span a wide range. Indiana is the cheapest market in the country at $3.23 a gallon, with Texas ($3.31), Oklahoma ($3.38), Tennessee ($3.38), and Louisiana ($3.47) also among the lowest. California remains the most expensive at $5.46, followed by Hawaii ($5.52), Washington ($5.20), and Oregon ($4.72). The gap reflects the usual mix of state taxes, fuel-blend requirements, and refining and distribution costs.

Diesel, a key cost input for freight and agriculture, has eased to a national average of $4.920, holding below $5 as the broader fuel complex retreats. The decline in distillate prices is a welcome development for the supply chains that absorbed the brunt of the war’s disruption to refining.

The outlook points lower so long as the crude collapse holds. With Persian Gulf exports back to roughly 75% of pre-war levels, Saudi Arabia loading tankers at Ras Tanura, and OPEC+ expected to lift quotas, the supply backdrop is firmly bearish for prices. A national average drifting toward the year-ago level near $3.20 is plausible if oil stabilizes at current pre-war prices through the summer.

The risks run the other way only if the fragile peace frays — a renewed Hormuz disruption, a breakdown in the 60-day roadmap, or an escalation in the security incidents that have continued sporadically, such as the recent strike on the container ship Ever Lovely. For now, though, drivers are enjoying the most sustained relief since the conflict began.

Continuing coverage: Gas Prices by State · Oil Prices · Geopolitics.