U.S. and Iran Reach Framework Agreement to Ease Tensions and Reopen Strait of Hormuz
National average gasoline prices fell to $4.07 per gallon on Monday after U.S. officials announced a framework agreement with Iran. The deal aims to extend a ceasefire and reopen key oil shipping routes.
ABC NewsNational average gasoline prices fell to $4.07 per gallon on Monday after U.S. officials announced a framework agreement with Iran aimed at easing tensions and reopening the Strait of Hormuz. Pump prices remain at four-year highs but have already dropped from this year's May average peak of more than $4.50, according to AAA data.
Crude oil prices stayed below $100 per barrel, supporting the downward trend.
U.S. officials said the framework agreement would extend the existing ceasefire and reopen the Strait of Hormuz, through which roughly one-fifth of the world's oil normally travels. The two sides reportedly plan to sign a final agreement later this week. Oil prices on Monday fell to their lowest level since March following the announcement.
Several states recorded the steepest increases during last month's surge. Indiana saw an 83.3-cent jump, Ohio an 78.1-cent increase, and Michigan a 68.0-cent rise. Those states have already begun to see prices decline as regional supply normalizes. California, Washington, Hawaii, and Alaska maintain averages above $5 per gallon.
California reached $5.741, Washington $5.513, Hawaii $5.563, and Alaska $5.101, according to AAA's latest figures.
Retail fuel prices lag behind crude oil movements because stations sell existing inventory purchased at higher prices. Refiners also require time to adjust production and secure new shipments. " — Giovanni Staunovo, UBS commodities analyst Patrick De Haan, head of petroleum analysis at GasBuddy, said the national average could continue falling provided there is no drastic reversal and the U.S. and Iran continue moving in a positive direction.
He noted that a handful of price-cycling states saw averages jump before joining the broader downward trend. U.S. crude production averaged just over 13.7 million barrels per day in 2026, according to the Energy Information Administration. Domestic output alone cannot fully insulate drivers from global price swings.
