The two-week ceasefire between the U.S. and Iran sent oil prices plummeting Wednesday, meaning American drivers should pay less for gas down the road.
Patrick De Haan, who tracks prices for GasBuddy, said on social media that gas prices could rise midweek but should start easing within 36 hours, resulting in a daily drop of 1 to 3 cents per gallon by the weekend.
Beyond that, analysts said, any decreases would depend on what happens overseas.
“It will certainly depend on whether or not the ceasefire holds, and it’s still very early given that it was just implemented in the last 24 hours,” said Caleb Jasso, a senior policy adviser at the Institute for Energy Research.
One major factor will be the volume of oil traffic through the Strait of Hormuz, which Iran agreed to reopen for two weeks as part of the deal with President Trump, who agreed to pause strikes on the Islamic republic.
Maritime traffic through the strait appeared to increase Wednesday, the first day of the ceasefire, but the uptick was mild. Countries were still working through issues, such as the extent of Iranian control over the strait and whether Iran could charge tolls.
Some reports said Iran would close the strait again because Israel kept up its attacks on Iran-backed Hezbollah in Lebanon.
As it stands, Mr. De Haan said, the national average price for a gallon of gasoline in the U.S. could fall below $4 within one to two weeks.
The national average price of gasoline was slightly below $3 per gallon when Mr. Trump launched the military operation against Iran on Feb. 28.
Iran responded by attacking energy sites in Persian Gulf states and choking off the strait, a critical waterway for oil exports in the region. The supply squeeze caused oil prices to spike.
Crude oil is the primary ingredient in gasoline, so any increase or decrease in crude prices means ups and downs at the gas pump.
The national average price per gallon stood at $4.14 Wednesday. Yet word of a two-week pause in the fighting sent crude oil prices tumbling below $100 per barrel.
The AAA motor club said in response to an inquiry from The Washington Times that it is difficult to predict how quickly gas prices will fall, given the many variables at play.
Although oil prices have dropped to around $90 a barrel, it is uncertain how long that will last, given the fluid geopolitical situation. The price of Brent crude was more than $110 per barrel in the days before the ceasefire.
Gas prices tend to rise during the spring and summer travel season, which could offset decreases from the ceasefire.
“When the price comes down, it will be noticeable, but it’s still going to be higher than it would be throughout other parts of the year, given that it is a high-travel season,” Mr. Jasso said.
Analysts said gas prices tend to fall more slowly than they rise after supply shocks, as businesses in the supply chain protect against losses or factor in future costs from another disruption.
Any decrease in gas prices, however, would ease some political pressure on Mr. Trump as the midterm campaign season heats up.
Mr. Trump likes to boast about lower gas prices during his second term from the sky-high levels they reached during the Biden administration, including an all-time high national average of $5.02 in June 2022.
Mr. Trump and his top lieutenants said some short-term pain from high oil and gas prices had been expected, but added that long-term gains from peace in the Middle East will be worth it.
Prices will “come down more than anyone understands” once the war is over, the president said in early March.
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