Share to ClassroomIran Deal Pushes US Gas Below $4
On June 18, the average price of gasoline in the United States fell to $3.99per gallon. This was the first time in almost three months that prices went below $4. The main reason was a deal signed by President Trump with Iran. The deal temporarily reopened the Strait of Hormuz— a narrow sea passage that carries about one-fifth of the world's oil supply. The strait had been closed since a conflict between Iran and the US began in late February.
After the deal, eleven oil tankers left Iran's Chabahar port. Together, they carried 20 million barrels of oil. This extra supply helped push oil prices down around the world. At the same time, China was buying much less oil than usual— about 40% less than its average in 2025. This also helped lower prices globally.
However, the situation is still uncertain. Peace talks planned for Geneva were suddenly cancelled. Also, Iran's Islamic Revolutionary Guard Corps (IRGC) — a powerful military group— briefly announced that the Strait of Hormuz was closed again, but Iran's government said this was not true. An energy analyst named Patrick De Haan predicted that US gas prices could drop below $3per gallon by the end of 2026 or early 2027, if the peace deal continues to hold.
