The nationwide average price of regular unleaded gasoline rose to $4.54 a gallon on Tuesday, the American Automobile Association said, the highest since July 2022 and less than 50 cents below the record of $5.01 set in June of that year. The average is $1.12 more than drivers were paying a year ago.
The milestone came the same day that oil prices fell sharply on reports of progress toward a deal to end the conflict with Iran. West Texas Intermediate crude dropped more than nine percent on Wednesday to settle below $93 a barrel after Secretary of State Marco Rubio said Operation Epic Fury had concluded and President Donald Trump announced a temporary pause of Project Freedom, the naval operation to escort ships through the Strait of Hormuz.
Gasoline prices have risen more than $1.50 a gallon since the war began. They briefly eased in April after the two sides announced a halt to hostilities but never fell below $4, a threshold first crossed in mid-March. At the end of April, prices jumped 27 cents in a single week as oil surged back above $100 a barrel.
California has the highest prices in the country at $6.01 a gallon, followed by Hawaii at $5.64 and Washington at $5.57. Five states are now above $5. In the Midwest, Michigan is at $4.58 and Ohio at $4.46.
On a seasonal basis, prices are at an all-time high for this time of year.
Mr. Trump has repeatedly said pump prices will come down once the war ends. A reopening of the Strait of Hormuz would relieve the supply pressure that has kept prices elevated, though analysts say a full normalization of shipping flows could take weeks.
Domestic gasoline supplies are at their lowest for this time of year since 2014, according to the Energy Information Administration, which reported that stockpiles fell from 228.4 million barrels to 222.3 million last week. Crude oil inventories declined by 6.2 million barrels. Morgan Stanley has said it expects further tightening into the summer.
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