US fuel prices to take ‘months’ to normalise after US-Iran deal to end war
Summary
A deal between the US and Iran to end the conflict has helped oil prices fall to their lowest point in three months. However, experts warn that it may take many months before US consumers see significant drops in petrol prices because of supply chain problems and high demand.Key Facts
- The US-Iran deal aims to end the war and reopen the Strait of Hormuz, a key shipping route for about one-fifth of the world’s oil and gas.
- Oil prices recently hit a three-month low as hopes rise that the shipping route will reopen.
- US petrol prices averaged $4.06 per gallon, down from a high of $4.48 in early May but still higher than $2.98 in February.
- Energy prices in the US have increased 7.7% in the past two months and 40% over the past year.
- Experts say petrol prices may not return to pre-war levels until 2027 due to slow recovery in oil supplies and ongoing high demand.
- It may take months for oil production to return to normal and for stockpiles like the US Strategic Petroleum Reserve to refill.
- Summer travel and supply chain delays could prevent quick price drops for consumers.
- The US and Iran agreed on a 60-day ceasefire negotiation period, and oil producers want to see lasting peace before fully restoring output.
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