Iran-U.S. Negotiations Send Gas Prices Plummeting by 13.6%

Gas prices have been plummeting in recent weeks due to negotiations between the United States and Iran, which has led to a decrease in tensions in the Middle East. The national average price of a gallon of gas stood at $3.92 on Monday, marking a decline of 62 cents, or 13.6%, since a month earlier.

The West Texas Intermediate futures price, the benchmark index for U.S. trading, registered at about $75.50 per barrel on Monday, a drop of more than 20% from a month earlier. Analysts expect that tanker traffic will resume in the Strait of Hormuz under the terms of an agreement between the two countries, which would lead to a potential burst of supply and push oil prices lower.

However, experts warn that the decline in oil prices is expected to slow down as some of the anticipated oil supply is already baked into current gasoline prices. Additionally, demand will keep prices elevated as countries move to refill depleted oil reserves and travelers hit the road for summer vacation.

Some analysts predict that gas prices could fall as low as $3.50 over the coming weeks if there's more positive news in the negotiations. However, others caution that an array of forces could limit or delay the drawdown in prices, including damaged oil infrastructure and potential shipping fees in the strait.

According to Tyler Schipper, a professor of economics at the University of St. Thomas, Minnesota, 'I suspect we'll see a continued drop in gas prices over the coming weeks, but at some point this will slow down.'