US Gas Prices Drop Below $4 After Iran MOU Signing, Except in California

Gas prices have dropped below $4.00 per gallon according to AAA across America after President Donald Trump signed the MOU with Iran. As the announcement was being made, oil prices fell sharply almost immediately.

But California’s gas prices remain high – $5.64 per gallon on average, and still higher than Hawaii”s gas prices. Hawaii has to tanker in all of its oil, whereas California could be self-sustaining if only the state allowed oil companies to drill and refine.

California imports more than 30% of its oil from the Middle East. The total foreign crude imports amount to approximately 290 million barrels, which is about 61% of California’s total refinery supply, according to California Energy Commission.

The national average price per gallon of diesel is more than $5.13, according to AAA. And in California, you’ll pay $6.88 per gallon of Diesel. Ouch.

Gas prices are expected to drop across all 50 states as the Iran deal that calls for the reopening of the critical Strait of Hormuz so oil can flow once again.

Indiana has the lowest gallon of gas at $3.39 per gallon.

Sadly, its most of the blue states which have the highest gas prices:

• Illinois – $4.28 per gallon
• Washington – $5.23 per gallon
• New York – $4.29 per gallon

Arizona and Nevada gas prices remain high as they purchase their oil from California:

• Arizona – $4.29 per gallon
• Nevada – $4.84 per gallon

A few blue states have lower gas prices :

• Minnesota: $3.79 per gallon
• Wisconsin: $3.80 per gallon
• Maryland: $3.83 per gallon

All told, 28 states have gas prices lower than $4.00 per gallon, while gas prices in 22 states and Washington, D.C., are higher than the $4.00 per gallon threshold.

As we witnessed, the Strait of Hormuz is the world’s most critical oil chokepoint, connecting the Persian Gulf to the Gulf of Oman and Arabian Sea. It lies between Iran and Oman, with a narrowest point of about 21 nautical miles wide, according to the Energy Information Administration.

The strait was mostly closed or after escalation in late February 2026 due to military actions, U.S. naval blockade of Iranian ports, mines, and insurance risks.

With the recent MOU signed, there is an immediate ceasefire extension to 60 days, the reopening the strait with toll-free safe passage for commercial vessels, and the lifting of the U.S. naval blockade.