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U.S. Average Gas Price Falls to $3.86 per Gallon
Nationwide gasoline prices declined to an average of $3.86 per gallon as of Monday. The drop follows reduced flows through the Strait of Hormuz after recent hostilities between the U.S. and Iran.
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Nationwide gasoline prices fell to an average of $3.86 per gallon as of Monday, according to AAA estimates. The figure remains higher than pre-conflict levels but marks a decline from the four-year high of $4.56 recorded in May.
Brent crude traded near $73 per barrel, returning to immediate prewar levels after peaking above $120 in late April. Oil continued to flow through the Strait of Hormuz despite renewed strikes over the weekend between the U.S. and Iran. A department spokesperson stated that fuel affordability affects national security and household budgets.
The American Petroleum Institute rejected the price-gouging allegations. Its spokesperson said gasoline prices do not move in direct proportion to crude prices during major supply disruptions.
Management's chief economist wrote that lower fuel costs could increase demand and slow progress on inflation. Yale University's Budget Lab associate director said the direct effect of lower energy prices would likely outweigh any indirect demand-driven pressure.
Harvard University professor James Stock said falling prices could reduce consumer interest in electric vehicles and slow the shift away from gasoline-powered cars. He noted that U.S. manufacturers already face challenges competing in the global EV market.
