US gasoline falls below $4 a gallon, boosts Trump ahead of midterms – Firstpost

US gasoline prices have fallen below $4-a-gallon mark for the first time in two months, offering relief to motorists and handing President Donald Trump a potential political boost ahead of November’s midterm elections as optimism over a preliminary US-Iran peace deal eased concerns about global oil supplies.

The national average retail gasoline price slipped to $3.997 per gallon, according to fuel price tracker GasBuddy, dropping below $4 for the first time since mid-April.

The decline followed a sharp fall in crude oil prices after Trump announced that Washington and Tehran had signed a memorandum of understanding aimed at ending a nearly four-month conflict that had disrupted energy markets and choked supplies through the Strait of Hormuz.

Crude prices fell by more than $4 a barrel on Monday as traders bet that a reopening of the Strait of Hormuz — a vital shipping route that carries nearly one-fifth of global oil flows — would restore supplies and ease pressure on fuel markets. Brent crude dropped to around $83 a barrel, down sharply from the highs seen during the conflict.

Political boost for Trump

The drop in fuel prices comes as welcome news for the Trump administration, which has faced criticism over rising living costs and surging energy prices since the outbreak of the war. Lower gasoline prices could help ease voter concerns over inflation and strengthen Republicans’ economic message as they seek to defend narrow majorities in both chambers of Congress.

Crossing below the $4 threshold carries particular significance in the United States, where analysts view it as a psychological barrier that often influences consumer spending and driving habits.

“The real test now shifts to the Strait of Hormuz, where any reopening and resumption of normal oil flows would be the clearest signal that this relief is durable,” GasBuddy’s head of petroleum analysis Patrick De Haan said. He added that prices could continue to decline provided there is no major reversal in negotiations between Washington and Tehran.

Americans still paying more at the pump

Despite the recent decline, fuel remains significantly more expensive than a year ago. GasBuddy data show prices are still nearly 91 cents per gallon higher than the same period last year, while the American Automobile Association reported a national average of $4.065 per gallon on Monday.

Americans have collectively spent roughly $46 billion more on gasoline since the conflict began, according to GasBuddy estimates. Fuel prices had surged above $4 a gallon in late March after Iran effectively blocked most shipping through the Strait of Hormuz, sending global oil prices soaring and fuelling broader inflationary pressures across the economy.

Inflation relief, but risks remain

The easing in gasoline prices could also provide some support in the fight against inflation. Consumer prices accelerated above 4 per cent in May, but lower fuel costs have helped moderate inflation expectations in recent weeks. Analysts say sustained declines in energy prices would reduce pressure on households and businesses alike.

However, market participants caution that the relief may prove temporary.

Analysts note that even if a final peace agreement is signed, restoring normal shipping operations through the Strait of Hormuz could take weeks due to the need to clear mines, reinstate marine insurance coverage and rebuild confidence among shipping companies.

Supply concerns could reverse gains

Adding to concerns, US gasoline inventories remain near their lowest seasonal levels in a decade, raising the risk of supply tightness during the peak summer driving season. Analysts warn that any setback in the peace process or renewed disruption in the Strait could quickly send oil and fuel prices higher again.

For now, though, falling oil prices and easing fuel costs have provided a rare piece of positive economic news for American consumers — and a timely political reprieve for Trump as the midterm campaign enters a crucial phase.

With inputs from agencies.