A fragile ceasefire between the U.S. and Iran led to some movement in the Strait of Hormuz in the hours after its announcement. But hundreds of vessels are now at a standstill again after Iran closed the strait on Wednesday.
President Trump’s Tuesday night announcement of a two-week ceasefire was contingent upon Iran agreeing to open the Strait of Hormuz. The news drove the price of oil down more than 15% Wednesday morning.
That could mean cheaper gas soon.
"In theory, oil prices plummeting today will affect prices later tonight and tomorrow," said GasBuddy's Patrick De Haan. "I would expect the national average could start declining at a pace of five to 10 cents a gallon in the next week. Beyond that, the second weeks could see a decline of seven to 15 cents a gallon."
That would be welcome relief for Americans, who are now paying an average of $4.16 per gallon, up more than a dollar from before the war.
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President Trump previously predicted oil prices would drop if the conflict ended. But even with Wednesday’s drop, crude oil is still 30% more expensive than before the war.
And experts say gas prices won’t get back to their pre-war level anytime soon.
"Just because we hear of a ceasefire doesn't mean the world is going back to normal. There's kind of a new normal," De Haan said. "Instead of seeing prices in the low $3 range, we could them in the mid to upper $3 range."
As for air travel, which has also gotten pricier because of a jump in jet fuel costs:
"Airfare pricing is far more complicated," said Chris Dane, President & Managing Partner at Hickory Global Partners. "I think you'll start to see airfare start to moderate within about two weeks, if this becomes a lasting ceasefire."
