Inflation dropped more than expected in June as gas prices eased in response to negotiations between U.S. and Iran over the Middle East conflict.

Prices rose 3.5% in June compared to a year earlier, marking a retreat from a year-over-year inflation rate of 4.2% in the prior month, federal government data released on Tuesday morning showed.

The reading for June marks the lowest inflation since March, though the pace of price increases remains more than a percentage point higher than its pre-war level.

Last month, oil prices fell to their lowest level since before the late February outbreak of the Iran war. That drop came after a preliminary agreement included provisions aimed at resolving a global crude shortage.

A spike in oil prices over recent days amid a resumption of fighting, however, threatens to push gas prices higher, erasing some of the relief delivered last month.

Brent crude futures, the benchmark index for worldwide trading, rose to $86.90 a barrel on Tuesday. That figure stood roughly even with its level a month earlier, though it remained more than 20% higher than its pre-war level.

The inflation report on Tuesday offered some additional bright spots outside of energy prices.

Core inflation — a measure of price increases that strips out volatile food and energy prices — clocked at 2.6% over the year ending in June. That reading indicated a slight decline from the previous month, suggesting the cooldown had extended beyond gasoline.