Black-gold blues: How long will we be paying wartime gas prices once peace deal is sealed?
Gas prices are unlikely to return to pre-war levels anytime soon, even if a U.S.-Iran peace deal reopens the Strait of Hormuz, leaving Americans facing higher pump prices for months.
The average price of gasoline in the United States was $4.54 per gallon on Wednesday, a significant increase from the sub-$3 prices seen before the start of the Iran War, according to data released by the American Automobile Association (AAA).
“The next third might take 3-6 months, and we’d finally get back to pre-war prices, I’d say right now in early/mid 2027,” Patrick De Haan of the market data and analysis firm GasBuddy told Axios.
De Haan added that relief may come after the strait is fully open, but the complete recovery will take longer, noting we may see a third reduction within one to three months.
Even if oil prices drop due to a peace deal, gas prices tend to lag because stations are still selling higher-cost fuel bought when prices were elevated.
The war has also damaged oil infrastructure across the Middle East creating another obstacle to restoring pre-war prices.
“[There had been] Massive damage to Middle East oil infrastructure will take months, in some cases years, to repair. National petroleum reserves are being similarly depleted as part of the IEA’s scheme. It will take the U.S. and other countries YEARS to rebuild those stocks,” energy industry veteran David Blackmon told the Daily Caller News Foundation.
Restoring normal oil flows through the affected region will also take time as producers restart shipments, tankers resume transit, and markets make adjustments to reduce the risk of disruption.
The Strait of Hormuz is the world’s most important oil chokepoint, with roughly 20% of the global crude demand having moved through the waterway ahead of the war, according to the U.S. Energy Information Administration. The conflict has disrupted oil flows to the mainland U.S. and helped push prices more than 50% above pre-war levels.
As the possibility of peace looms, oil prices have seen a significant decline, with Brent crude dropping below $100 per barrel on Wednesday.
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