Even if the Iran war ended today, US fuel prices aren’t likely to normalize this year
Summary
Even if the war between the US and Iran ended immediately, gas prices in the US are unlikely to return to prewar levels soon. This is because fixing damaged oil infrastructure and resolving supply chain problems will take months or even years.Key Facts
- The current US average gas price is $4.55 per gallon, about $1.50 higher than before the US and Israel attacked Iran in February.
- About 25% of global oil shipments, around 20 million barrels a day, pass through the Strait of Hormuz, which is affected by the conflict.
- Turning crude oil into gasoline usually takes 30 to 60 days, including extraction, refining, and delivery.
- Oil wells in the Gulf region use slower traditional pumping methods compared to faster US shale wells.
- Restarting refineries and clearing shipping backlogs in the Gulf could take 3 to 5 weeks or more.
- Experts estimate it could take between six months to two years for prices to normalize after the conflict ends.
- Jet fuel prices in Europe have been high but are easing somewhat due to lower demand from reduced flight bookings.
- Seasonal changes and ongoing demand also influence fuel prices during the conflict.
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