Americans Could Continue Facing High Gas Prices Long After Iran Agreement

Gas Prices to Remain High Despite Potential Peace Deal

Gas prices in the U.S. are not expected to drop back to pre-war levels anytime soon, even if a peace deal between the U.S. and Iran reopens the Strait of Hormuz. This means that Americans could be facing elevated fuel costs for quite a while.

As of Wednesday, the average cost of gasoline stood at $4.54 per gallon, a notable rise compared to the prices below $3 seen before the start of the Iran War, according to the American Automobile Association (AAA).

Patrick De Haan from GasBuddy mentioned to Axios that it might take about 3 to 6 months for prices to start reaching pre-war levels, perhaps not until early to mid-2027. He believes that while there could be some relief once the strait is fully operational, the overall recovery might take longer, with a significant price drop possibly occurring within the next one to three months.

Even if oil prices decrease due to a peace agreement, gas prices are likely to lag behind. Stations still have fuel that was purchased at higher costs, which makes it hard for prices at the pump to drop immediately.

The conflict has also inflicted damage on oil infrastructure across the Middle East, adding another hurdle to returning to those lower prices. David Blackmon, an energy industry expert, explained that the considerable damage to oil infrastructure will require months, or even years, to fix. Additionally, national petroleum reserves are being depleted as part of the International Energy Agency’s plan, meaning it will take an extended period for the U.S. and other nations to rebuild their stockpiles.

Bringing regular oil flows back to the region will also require time as producers restart their shipments and tankers resume their routes, all while markets adjust to minimize disruption risks.

The Strait of Hormuz is vital for global oil transport, accounting for around 20% of the world’s crude demand before the war, as reported by the U.S. Energy Information Administration. The ongoing conflict has affected oil deliveries to the U.S. and resulted in prices that are more than 50% higher than before the war began.