The national average for a gallon of regular gasoline fell to $3.99 on Thursday, dropping below $4 for the first time since March 30, AAA reported, marking a third straight week of declines just as the summer travel season gets going. AAA said drivers are getting a break at the pump as crude oil prices ease.
The relief is real but partial. Gas prices are up nearly 40% since late February, when the U.S. and Israel launched the war against Iran and global oil supply tightened. The national average sat near $2.98 in late February before climbing sharply, so even at $3.99 households are paying far more than they were at the start of the year.
Where you live still matters enormously. In five states — Alaska, Hawaii, Nevada, Oregon, and Washington — average prices are at or near $5 a gallon, and California is close to $6, the highest in the nation. Drivers in the middle of the country are paying the least.
Road trips are getting a closer look as a result. AAA forecast that 39.1 million people would drive at least 50 miles over the recent Memorial Day stretch, up just 0.1% from a year earlier — the weakest growth in a decade. The softness suggests some families are trimming plans even as headline pump prices ease.
Air travel is a tougher story. Jet fuel costs have nearly doubled since February, and the squeeze is showing up in fares. The U.S. Energy Information Administration, in its June Short-Term Energy Outlook, raised its 2026 jet fuel forecast by about $1.42 a gallon, to an average near $3.37, citing the de facto closure of the Strait of Hormuz as the main pressure on diesel and aviation fuel.
Travelers are feeling it at booking. Domestic round-trip airfares are averaging about $623, according to the Airlines Reporting Corporation, a 10% to 15% jump from last year, and fares have not been this high since May 2022. Airfare last reached these levels when carriers stumbled out of the pandemic to meet a wave of “revenge travel.”
Airlines say they are passing fuel costs along because they have little choice. American Airlines estimated its fuel bill will run about $4 billion higher this year than in 2025, and Delta said it would pay $2 billion more in the second quarter alone. The trade group Airlines for America reported that fuel made up 20% of airline operating expenses in 2025, with labor the only larger cost.
The fuel crunch has reshaped schedules well beyond the United States. Lufthansa has grounded some short-haul aircraft, and Cathay Pacific canceled about 2% of its passenger flights between mid-May and the end of June. Roughly 13,000 flights were canceled globally in May as carriers pulled back on thinner routes.
For consumers, the split picture means the math of a summer trip now depends heavily on how you travel. Driving has gotten modestly cheaper in recent weeks and may keep easing if crude stays below $100, while flying remains expensive and, in some markets, less reliable. The Transportation Security Administration expected to screen about 18.3 million people over a recent holiday travel window, roughly in line with last year, a sign that demand is holding even as prices bite.
The strain is hitting an industry already under stress. Higher fuel costs and softer demand have tested weaker carriers, and the broader travel market is absorbing the shock at the same time households are paying more for groceries, clothing, and housing.
The near-term outlook hinges on oil. If reports of progress toward easing the Iran conflict hold and crude keeps drifting lower, pump prices could fall further into the heart of the driving season. But jet fuel tends to be the last product to recover when refining capacity is tight, so airfare relief is likely to lag what drivers see at the gas station. For now, the cheapest summer trip for many families may be the one that stays on the road.
JBizNews Desk | New York & Washington
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