Even if a peace deal between Iran and the U.S. is reached imminently, it could still take as long as a year for pre-war gas prices to return, experts warned.
President Donald Trump’s war in Iran, now in its ninth week, has seen average gas prices rocket from $3 before the conflict to $4.54 per gallon, according to AAA data.
Trump said there is a “very good chance” the conflict will end soon as the two sides wrangle over a peace deal. He has reassured Americans that gas prices will “go down as soon as the war is over.”
But experts cautioned it’s not quite so simple. While there would be some relief in the following days if the Strait of Hormuz were to reopen fully, prices would take longer to recover. Tensions have simmered over the Strait, the essential waterway where a fifth of the world’s oil passes through, which is still being blocked by Iran.
“Even assuming a true and lasting end to the military conflict, it would still be several months before traffic through the Strait of Hormuz returns to its pre-war level,” Rob Smith, an analyst with S&P Global Energy, told Axios.
“U.S. gasoline prices would … decline in the months following an end to the war but would be unlikely to return to pre-war levels before the end of the year,” Smith added.
Patrick De Haan, head of petroleum analysis at GasBuddy, told the outlet he anticipated pre-war prices would return “in early/mid 2027.”
De Haan added that he estimated prices would come down by about a third within one to three months.
The reason for the lag is to do with global fuel movements and retail pricing back home in a phenomenon economists refer to as “rockets and feathers.”
When oil prices increase, so do gas prices, which represents the “rocket” part of the analogy. When oil prices drop, gasoline prices follow but drift down at a much slower rate, representing the “feather,” the Federal Reserve Bank of St. Louis explained.
Another concern, even if a peace deal is reached, is whether Iran would shut down the Strait of Hormuz in the future.
“It would take little effort for Iran to deter shippers from resuming traffic,” Gregory Brew, a political risk consultant with the Eurasia Group, wrote for Foreign Affairs. “Its military capabilities have been degraded but not destroyed.”
The Trump administration has claimed that Americans could see gas prices drop even lower than they were before the war.
“Americans will see oil and gas prices drop rapidly, potentially even lower than they were prior to the start of the operation,” White House press secretary Karoline Leavitt said in early March.
