Gasoline prices on Tuesday dropped below $4 a gallon for the first time since mid-July, after President Trump signaled he’s not planning to strike Iran anytime soon.
National average gasoline prices fell to $3.98 a gallon, according to AAA – their first time below the $4 mark since July 20. Diesel, which is used for heavy trucks and farming equipment, remained stubbornly high at $6.16 a gallon.
The fall in gas prices followed a large drop in oil costs. Brent crude futures briefly fell below $90 a barrel Tuesday morning for the first time since August after plunging 13% last week – the steepest one-week decline since the pandemic shutdown in April 2020.
Joe Adamski, managing director of ProcureAbility, a supply chain consultancy, said gas prices could stay below the $4 level until the spring as long as markets continue to expect negotiations in the Middle East conflict.
“Current forecasts show a potential floor of $3.60 to $3.65, so there is still some room to come down. Gas station markups are above normal at the moment, supporting some room for a downward shift,” Adamski told The Post.
“But any breakdown in peace talks or another attack on Gulf oil supplies could reverse any gains within days.”
Trump said Monday that the Iran war “is effectively over” militarily, as his administration meets with mediators in negotiations over the Islamic Republic’s nuclear program.
As long as those negotiations continue, it’s “highly unlikely” the US will resume strikes on Iran, the president said over the weekend.
The Democrats’ midterm sweep in elections around the country last week also helped drive oil futures lower, as traders are expecting lefty pols to keep pressure on the Trump administration to reach a deal in the Middle East soon.
Gasoline prices are still about 30% higher than they were before the US and Israel launched strikes on Iran on Feb. 28, and roughly 40% higher than the beginning of this year.
Rising energy costs were also still one of the main drivers of inflation in October, according to data released by the Bureau of Labor Statistics Tuesday morning.
Gasoline jumped 1% over the month and 37.4% over the past 12 months. Fuel oil – which is used to heat homes – saw one of the largest increases over the month, a major concern just in time for the colder months.
Economists have warned that higher diesel costs can easily bleed into the rest of the economy. Virtually all consumer goods – from food to apparel – are transported around the country on heavy trucks that run on the pricey fuel.
Food prices rose 0.5% in October. Airfares rose 0.4% over the month and about 27.8% over the year. It’s one of the categories most impacted by rising energy prices, as fuel accounts for the bulk of airlines’ operating costs.