Crude oil prices plummeted below $80 per barrel this week, after the U.S. and Iran said they had reached an agreement that would reopen the Strait of Hormuz and end a U.S. blockade of Iranian ports. This is the lowest price for crude since March. Gas prices have been steadily decreasing since May 22, but are still about a dollar per gallon more than before the conflict started. For the week, the national average for regular gasoline tumbles 12 cents to $4.04 a gallon. The Oregon average also falls 12 cents to $4.98 a gallon.
The Oregon average fell below $5 per gallon on June 14. The Oregon average was at or above $5 from April 7 – 10, and again from April 24 – June 13.
The agreement between the U.S. and Iran to reopen the Strait of Hormuz has sent crude oil prices sharply lower, between about $75 and $80 per barrel. West Texas Intermediate, the U.S. benchmark for crude, was at $67 per barrel on Feb. 27, the day before the U.S. and Israel launched strikes against Iran.
Gas prices have been steadily decreasing for more than three weeks on ongoing hopes that the conflict would end. It will likely take longer for pump prices to return to pre-conflict levels as it will take time for shipping to return to normal in the Strait of Hormuz. The removal of mines in the Strait of Hormuz and building up depleted inventories could take weeks or months.
Even with the recent declines, U.S. pump prices are still the highest they’ve been during this time of year since 2022 after Russia’s invasion of Ukraine sent crude oil prices above $100 per barrel.
Gas prices remain significantly more than they were before the conflict with Iran began. The National average for regular gas was $2.98 and Oregon average was $3.92 on Feb. 28, the day the U.S. and Israel launched airstrikes against Iran.
Crude oil prices remain volatile, with dramatic swings driven by concerns of how the conflict with Iran impacts global oil supplies. Since the conflict with Iran started, prices for West Texas Intermediate, the U.S. benchmark for crude, have ranged between $71 and nearly $113 per barrel. Crude was at $67 per barrel on Feb. 27, the day before the conflict began.
“Markets are optimistic after the U.S. and Iran said their agreement includes the reopening of the Strait of Hormuz to shipping traffic by this Friday, but it will take time for shipping and production in the Middle East to return to pre-conflict levels,” says Marie Dodds, public affairs director for AAA Oregon/Idaho.
In general, every $1 increase in the price of crude oil leads to a 2.4- to 2.5-cent increase in the price of gasoline.
For now, few ships are passing through the Strait of Hormuz. Mines in the strait need to be removed and it will take time for oil production in the Middle East to rebound. Normally, about 20% of the world’s oil and refined products flow through the Strait of Hormuz, which is the narrow passageway of the Persian Gulf and is bordered by Iran. Tankers traveling through the Strait of Hormuz carry oil from major producers in the Middle East including Saudi Arabia, Kuwait, Bahrain, UAE, Qatar, Iraq and Iran. Any disruption in the straight can impact global oil supplies and send crude oil prices higher.
The Oregon average for regular gas began 2026 at $3.42 a gallon. The highest price of the year so far is $5.353 on May 20. The lowest price of the year so far is $3.33 on January 20. The record high for the Oregon average is $5.548 set on June 15, 2022.
The Washington average for regular gas began 2026 at $3.86 a gallon. The highest price of the year so far is $5.789 on May 20, which is the record high for Washington. The lowest price of the year so far is $3.79 on January 14.
The national average began 2026 at $2.83 a gallon. The highest price of the year so far is $4.564 on May 21. The lowest price of the year so far is $2.795 on January 11. The record high for the national average is $5.016 set on June 14, 2022.
Demand for gasoline in the U.S. gasoline increased from 8.59 million b/d to 8.73 million for the week ending June 5. This compares to 9.17 million b/d a year ago. Total domestic gasoline supply increased from 215 million barrels to 215.1 million. Gasoline production increased last week, averaging 9.7 million barrels per day, compared to 9.4 million barrels the previous week.
In addition to the conflict in the Middle East, pump prices are also impacted by the normal seasonal factors. Gas prices typically rise starting in mid-to-late winter and early spring as refineries undergo maintenance ahead of the switch to summer-blend fuel, which is more expensive to produce and less likely to evaporate in warmer temperatures. The switch occurs first in California, which is why pump prices on the West Coast often rise before other parts of the country. The East Coast is the last major market to switch to summer-blend fuel. Most areas have a May 1 compliance date for refiners and terminals, while most gas stations have a June 1 deadline to switch to selling summer-blend. Switch-over dates are earlier in California with some areas in the state requiring summer-blend fuel by April 1. Some refineries will begin maintenance and the switchover in February.
Gas prices usually drop in the fall, due to the switch from summer-blend to winter-blend fuel, which costs less to produce. The switch starts in September. Many areas, including Oregon, can sell winter-blend fuel starting September 15. However, Northern and Southern California require summer-blend fuel through October 31. Prices usually decline to their lowest levels of the year in late fall and early winter before increasing again in the late winter and early spring.
The U.S. price of crude oil (West Texas Intermediate) has fallen sharply this week, as markets react to the preliminary peace deal between the U.S. and Iran. Oil prices rose after the conflict began, due to global supply disruptions. WTI had mostly been in the upper $50s to mid-$70s since September 2024. Oil prices rose in February, in part driven by escalating tensions between the U.S. and Iran. Then crude oil prices shot up after the strikes on Iran by the U.S. and Israel on February 28. Any conflict with Iran can send oil prices higher, as Iran is a major oil producer and about a fifth of the oil consumed globally travels through the Strait of Hormuz between Iran and Oman.
WTI is trading around $76 today, compared to $88 a week ago and $72 a year ago. In 2025, West Texas Intermediate ranged between $80.04 (January 15) and $57.46 (October 16) per barrel. In 2024, WTI ranged between $66 and $87 per barrel. In 2023, WTI ranged between $63 and $95 per barrel. WTI reached recent highs of $123.70 on March 8, 2022, shortly after the Russian invasion of Ukraine, and $122.11 per barrel on June 8, 2022. The all-time high for WTI crude oil is $147.27 in July 2008.
Crude prices are determined in international markets, based on global supply and demand, and are impacted by economic news as well as geopolitical events around the world including the conflict with Iran and disruptions in the Strait of Hormuz, economic uncertainty, the situation in Venezuela, tensions over Greenland, sanctions on Iran’s oil, unrest in the Middle East, the conflict between Israel and Hamas, and the war between Russia and Ukraine. Russia is a top global oil producer, behind the U.S. and Saudi Arabia.
In addition, moves by OPEC+ impact crude oil prices. Production cuts by the cartel in previous years tightened global crude oil supplies, which continued to impact prices. But in 2025, the cartel boosted production which put downward pressure on crude oil prices. For the first quarter of 2026, OPEC+ said it would not have production hikes in the first quarter of this year due to lower demand. However, at its meeting on March 1, OPEC+ said it would boost oil production this spring; However, oil production in the Middle East has plunged due to the Iran war, according to OPEC data.
Crude oil is the main ingredient in gasoline and diesel, so pump prices are impacted by crude prices on the global markets. On average, about 57% of what we pay for in a gallon of gasoline is for the price of crude oil, 21% is refining, 8% distribution and marketing, and 14% are taxes, according to the U.S. Energy Information Administration.
Meanwhile, crude oil production in the U.S. remains at or near record highs. The U.S. Energy Information Administration (EIA) reports that crude production in his country is at 13.79 million barrels per day for the week ending June 5. Production has been at 13.5 million barrels per day many times since October 2024. The U.S. has been the top producer of crude oil in the world since 2018 and has been increasing its oil production since about 2009.
Quick stats
Oregon is one of 49 states and the District of Columbia with lower gas prices this week. Utah (-22 cents) has the largest week-over-week decline in the nation. New Mexico (-5 cents) has the smallest decrease. Hawaii (+1 cent) is the only state with a week-over-week increase.
California ($5.71) has the most expensive gas in the nation for the 19th week in a row. Hawaii ($5.58) is second, Washington ($5.49) is third, and Alaska ($5.09) is fourth. These are the four states with averages at or above $5 per gallon. This week there are 20 states and the District of Columbia with averages at or above $4 a gallon, and 26 states have averages in the $3-range. No state has an average in the $2 range this week.
The cheapest gas in the nation is in Indiana ($3.36) and Texas ($3.50). No state has had an average below $2 a gallon since January 7, 2021, when Mississippi and Texas were below that threshold. At the time, the COVID-19 pandemic drove significant declines in crude oil and gasoline demand in the U.S. and around the world.
The difference between the most expensive and least expensive states is $2.35 this week, compared to $2.45 a week ago.
All 50 states and the District of Columbia have lower prices now than a month ago. The national average is 47 cents less and the Oregon average is 36 cents less than a month ago. Indiana (-81 cents) has the largest month-over-month drop in the nation. Hawaii (-5 cents) has the smallest.
All 50 states and the District of Columbia have higher prices now than a year ago. The national average is 90 cents more, while the Oregon average is 99 cents more. Oregon has the 24th-largest year-over-year increase in the country. Alaska (+$1.43) has the largest year-over-year jump in the nation. Indiana (+20 cents) has the smallest.
West Coast
The West Coast region continues to have the most expensive pump prices in the nation with all seven states in the top 10. It’s typical for the West Coast to have six or seven states in the top 10 as this region tends to consistently have fairly tight supplies, consuming about as much gasoline as is produced. In addition, this region is located relatively far from parts of the country where oil drilling, production and refining occurs, so transportation costs are higher. And environmental programs in this region add to the cost of production, storage and distribution.
Diesel
Diesel prices are lower in all 50 states and the District of Columbia this week. Montana (-22 cents) has the largest week-over-week decrease. The District of Columbia (-1 cent) has the smallest.
For the week, the national average falls 13 cents to $5.19 a gallon. The record high is $5.816 set on June 19, 2022.
The Oregon average loses 12 cents to $5.84. The record high is $6.47 set on July 3, 2022.
A year ago the national average for diesel was $3.53 and the Oregon average was $4.22.
Source: AAA