Key insights
- Falling gas prices for seven consecutive days, with the national average dropping to $4.43, offer some relief to consumers. While still elevated compared to pre-conflict levels, this trend could slightly ease inflationary pressures and potentially support consumer spending, though geopolitical factors remain a key risk to energy markets and broader economic stability.
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Drivers are finally getting a bit of relief at the pump after gas prices have declined every day for a week. Down 13 cents over that stretch, the national average for regular gasoline now stands at $4.43 a gallon, according to AAA.1
That’s a slight improvement from the recent peak of $4.56 per gallon, which was first reached on May 7 and matched again on May 21. Prices have surged this spring due to the Iran conflict pushing oil prices sharply higher and rattling global energy markets.
Before the conflict began, drivers had been enjoying relatively low prices at the pump, with the national average holding in $2 territory for almost all of December, January, and February. It was the first sustained stretch in that range in almost five years.
That relative calm stands in contrast to how volatile gas prices can become during geopolitical shocks. For instance, the national average briefly topped $5 per gallon in June 2022 after Russia’s invasion of Ukraine disrupted global oil supplies.1
Even with gas prices easing slightly, a typical driver is still spending $65 to $70 more per month on fuel than before the Iran conflict began—while two-driver households could be paying about $130 to $140 more.
During the recent peak, every state was averaging at least $4 per gallon. Now, six states have fallen back below that threshold. Prices at the pump are now cheapest in Indiana, averaging $3.82, with Texas, Georgia, Mississippi, Oklahoma, and Louisiana also offering sub-$4 gas.2
At the other end, California is averaging $6.08, while Washington, Hawaii, Oregon, Alaska, and Nevada currently range from $5.22 to $5.74 per gallon. The price difference between California and Indiana is $2.26 per gallon right now.2
Differences in fuel taxes, supply networks, and environmental regulations can create wide price gaps, while states farther from refineries or with stricter fuel standards often end up paying more at the pump.
While drivers are finally seeing some relief at the pump, analysts say gas prices could remain unpredictable in the weeks and months ahead.
Fuel prices are still elevated because oil markets continue reacting to tensions involving Iran and the Strait of Hormuz, a critical global shipping route for crude oil. Patrick De Haan, head of petroleum analysis at GasBuddy, recently warned this could become the “most volatile summer at the pump in years,” adding that even after the Strait reopens, “it could take a year or more for prices to fully recover.”3
Even if oil prices continue easing, retail gas prices often fall more slowly than they rise—a pattern some economists describe as “rockets and feathers.” Stanford economist Neale Mahoney recently said prices at the pump can “float down like a feather” after crude oil prices fall—in part because when gas prices start declining, drivers pay less attention and shop around less. That puts less pressure on stations to compete by cutting prices.4
For now, it’s unclear whether the recent easing in gas prices will continue. Oil markets remain highly sensitive to developments involving Iran and the Strait of Hormuz, meaning another stretch of declines, a plateau, or renewed increases at the pump are all still possible in the weeks ahead.
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