NEW YORK, June 18, 2026, 04:28 EDT
- Oil dropped to its lowest price since early March after the United States and Iran signed an interim deal to end the war and reopen the Strait of Hormuz.
- U.S. regular gasoline averaged $3.999 a gallon on June 18, AAA said. That’s down from $4.129 a week ago. Still, prices are higher than this time last year.
- Relief at the pump could take time, with U.S. crude and gasoline stocks still tracking below usual seasonal norms.
Oil dropped more than $2 a barrel Thursday after the U.S. and Iran signed an interim deal to end the Iran war, reopen the Strait of Hormuz, and lift U.S. sanctions on Iranian oil exports. The move turned market attention away from supply risks and toward how fast exports might come back. U.S. drivers were seeing prices just under $4 a gallon for regular gas.
The timing is key as the decline is hitting in the middle of the U.S. summer driving season, a period when gasoline demand is typically strong and fuel costs hit consumers directly. While falling crude prices are expected to bring pump prices down, the actual drop tends to lag, with refiner activity, inventories and taxes all affecting the speed of the move.
US and Iran have 60 days to hash out a full deal under the 14-point memorandum. The memo says the US will begin rolling back its naval blockade. Iran promises its “best efforts” for toll-free commercial ships in the Strait of Hormuz in that period, with traffic expected to get back to normal inside 30 days. The strait, a key route from the Persian Gulf to the Gulf of Oman, carried about 25% of global seaborne oil trade in 2025, according to the IEA. Reuters
Brent crude lost $2.14 at $77.41 a barrel by 0616 GMT. U.S. West Texas Intermediate slipped $2.36 to $74.43. IG’s Tony Sycamore said in a note traders were betting on a “faster-than-expected return of Iranian barrels.” Reuters
Retail gas prices keep slipping. The national average for regular gas dropped to $3.999 on Thursday, AAA said, from $4.025 the day before, $4.129 last week and $4.515 last month. Diesel still runs higher at $5.129.
U.S. gasoline prices usually move “in lockstep” with global crude, Gregory Brew, senior analyst on Iran and oil at Eurasia Group, told New York Magazine. Brew said if the deal lasts, more Gulf supply would bring “quite a lot of downward pressure,” but gas prices probably won’t fall fast. Gas is likely to hold above $3.50 with inventories low and local output still recovering, he said. New York Magazine
US stockpiles put traders on edge on Wednesday. Commercial crude inventories dropped by 8.3 million barrels to 418.2 million, or 6% under the five-year norm, according to the Energy Information Administration. Gasoline stocks also slipped, down 0.9 million barrels and 6% below the five-year average, while refineries continued to operate at 96.7% capacity.
IEA said Gulf oil shipments started to climb again in early June. Ship-to-ship moves in the Gulf of Oman pushed total flows from 9.6 million barrels per day in May to around 12 million. The agency doesn’t expect a quick return to normal, saying mines have to be cleared and logistics still need to settle. It also cautioned that if Middle East supply comes back strong, the market could see a big surplus by 2027.
Competition is changing. Saudi Arabia and the UAE have some pipelines that avoid Hormuz. The IEA says most other Gulf states still depend on the strait. American producers stepped in to fill supply during the war, but more Iranian and Gulf oil could weigh on them now if demand remains soft.
The agreement is still shaky. A senior U.S. official said both sides could pull out, with sequencing, sanctions, and Iran’s nuclear program still unresolved. Mukesh Sahdev, CEO at XAnalysts, said some tanker owners might hold off on returning ships to the area, and crude demand “may come faster than supply,” which could keep prices from dropping much. Reuters
Motorists are seeing mixed results at the pump. AAA data put regular gas at $3.399 in Indiana and $3.493 in Texas. Prices are much higher in California at $5.642 and in Washington at $5.436. Those states can stay elevated on taxes, fuel standards and supply distance even as crude drops.
