Drivers in the United States can breathe a small sigh of relief — average gas prices have dropped below $4 a gallon for the first time since March.
The national average price for regular gasoline fell to $3.99 a gallon on Thursday, according to AAA.
Gas prices hit a record high of $5.02 in June as drivers filled their tanks for the summer travel season. They were also pushed higher by soaring global oil prices as the West turned its back on Russian crude in the wake of Moscow’s invasion of Ukraine.
But prices at the pump have since tumbled 21% as drivers have pared back spending and fears of a recession threatened to crimp demand. Despite the drop, they remain 25% higher than this time last year.
“Despite steadily falling gas prices during the peak of the summer driving season, fewer drivers fueled up last week,” the AAA said in a Monday press release.
“It’s another sign that, for now, Americans are changing their driving habits to cope with higher pump prices.”
US crude oil prices have also fallen sharply from a peak above $120 a barrel in June to around $92 a barrel on Thursday, helped by an easing of the global supply crunch.
In a report released Thursday, the International Energy Agency revised up its outlook for global oil supply, partly because Russia has continued to pump more oil than expected.
“While Russia’s exports of crude and oil products to Europe, the US, Japan and Korea have fallen by nearly 2.2 [million barrels per day] since the start of the war, the rerouting of flows to India, China, Türkiye and others, along with seasonally higher Russian domestic demand has mitigated upstream losses,” the Paris-based agency said.
By July, Russian oil production was only 310,000 barrels per day below pre-war levels while total oil exports were down just 580,000 barrels per day, it added.
The release of 180 million barrels of oil from the US Strategic Petroleum Reserve has also helped bump up supply.