US fuel prices to take months to normalize after US-Iran deal to end war

A preliminary deal to end the US-Iran war has sent oil prices tumbling to a three-month low, sparking hopes that the Strait of Hormuz will reopen. However, American consumers may have to wait months for significant relief at the petrol pump, according to experts.

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The potential deal that the US and Iran agreed to over the weekend certainly could pave the way for even lower prices… in the next two to three days by what we saw over the weekend.

The closure of the strategic chokepoint disrupted global energy markets for over three months, impacting a major shipping route for roughly one-fifth of the world's oil and liquefied natural gas. While U.S. President Donald Trump has suggested prices would "drop like a rock" once the strait reopens, analysts caution against expecting immediate results.

Experts note that while Asian markets are more reliant on oil from the Strait of Hormuz, tight supply and steady demand have already pushed prices higher worldwide. In the U.S., petrol prices remain above $4 per gallon, a significant increase from earlier in the year and a 40 percent rise from a year ago. Although prices have begun to fall as negotiations progressed, a major decline is not anticipated immediately.

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It may take many months, if not beyond a year, for global oil inventories to recover to pre-war levels.

Patrick De Haan, head of petroleum analysis at GasBuddy, suggests that consumers might not see gas prices return to pre-war levels until 2027, even if a ceasefire holds. He explained that it could take many months, possibly over a year, for global oil inventories to recover. Additionally, supply chain strains, the need for producers to ramp up output, port bottlenecks, and heightened demand during the summer travel season could further delay substantial relief for consumers.

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There are some mitigating factors that are going to slow the decline in prices. There are a lot of organisations and companies that have to re-up their stockpiles [like the US’s strategic petroleum reserve] and fulfil contracts that have been on hold for the last few months.