Crude futures are tumbling thanks to the US-Iran ceasefire, but don’t expect the price of a tank of gas to plunge overnight.
West Texas Intermediate futures for May fell about 16% to below $95 a barrel early Wednesday, as investors cheered President Trump’s two-week truce with Iran.
Wholesale gasoline futures for May (RBOB), a bellwether for future gas prices, dropped 10% to just under $3 a gallon.
Those are welcome moves for American consumers, who’ve seen regular gas prices jump from under $3 a gallon before the war to over $4.15, per AAA’s price guide. Similarly, diesel has surged from under $3.90 a gallon to over $5.60.
But it’s worth underscoring that WTI futures are still up by more than 60% in 2026, and RBOB is up by more than 70%. The two benchmarks stood at around $58 and $1.71, respectively, at the start of January.
In other words, gas prices are still much higher than even a few weeks ago — and they could remain elevated for a while, analysts say.
A key reason is that it typically takes a couple of weeks to refine crude oil into gasoline, transport it through pipelines, tankers, and trucks, and deliver it to gas stations.
Many gas stations also buy fuel in advance, so even if their latest shipment is cheaper, they’re likely to seek to sell their costlier inventory before materially cutting prices.
Price cuts could take even longer this time, given the massive disruption to the global energy supply chain from Iran’s conflict with the US and Israel.
A key issue has been the virtual closure of the Strait of Hormuz, through which 20% of global oil and gas flows normally pass. Trump’s ceasefire promises to open the shipping channel, but it remains to be seen on what terms.
Saxo Strategy Team wrote that even “if the ceasefire holds, a return to ‘normal’ could still take months given the time it takes to reopen shuttered wells, and before crews and vessels are in the right places, and refineries are fully repaired and restocked.”
The bank’s team said that more than 800 vessels are stranded in the Persian Gulf, and their captains and owners might still shy away from traversing the Strait of Hormuz until they’re confident it’s safe.
Susannah Streeter, Wealth Club’s chief investment strategist, wrote in a morning note that “allowing more tankers through won’t relieve the energy squeeze immediately,” as damage to oil-and-gas facilities across the Gulf has curbed refining capacity, and it “could take years” for supply to return to pre-conflict levels, given the extensive repairs that need to be carried out.
“So, although prices at the pumps may ease off in the coming weeks, they still could remain stubbornly high if oil prices hang around this level,” she added, noting they’re still around 35% higher than in mid-February.
Iran is also reportedly charging ships to pass through the Strait of Hormuz, which could lead companies to pass on those higher costs to customers by charging higher prices for oil and gas products.
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