Gasoline prices may stay high for months even if Iran war ends

Drivers in the United States should not expect immediate relief at the pump despite the recent shift in congressional control. While the new majority in Congress holds some levers to influence foreign policy, energy experts warn that mechanical and logistical delays will keep fuel prices elevated for months.

The cost of living crisis that drove many voters to the polls stems directly from the war in Iran. Before the conflict began, roughly 20% of global oil supply moved through the Strait of Hormuz. The blockade of that waterway pushed Brent crude from approximately $70 per barrel in late February to a peak near $110. The price has since settled near $95, but the impact on consumers remains sharp.

According to AAA data, the average price of gasoline stands at $4.12 per gallon, an increase of about $1 compared to a year ago. Diesel prices reached a record high of $6.52 in September. Although diesel prices have declined slightly since that peak, a gallon still costs about $2.50 more than it did a year ago. These increases have boosted profits for major oil companies while raising the cost of trucking and nearly every other goods category.

The new Congress is not yet in session. Members will be sworn in in January, giving the new majority time to prepare legislative moves. One primary tool for the incoming lawmakers is the power to restrict war spending. Senate Minority Leader Chuck Schumer said Democrats intend to use this power to end the conflict. He described the situation to reporters on Wednesday, stating that relief is on the way.

Claudio Galimberti, chief economist at Rystad Energy, noted in a market note that a unified Democratic Congress can make military escalation more expensive. He explained that both chambers can pass resolutions, attach conditions to war funding, and hold back the confirmation of key officials. However, President Trump retains executive authority over military strikes, blockades, and sanctions.

The administration has sent conflicting signals regarding the war. In recent weeks, President Trump warned Gulf Arab countries to prepare for a new campaign. On November 2, U.S. forces struck Qeshm island, a location in the Strait of Hormuz used by Iran for its own attacks. Following the election, President Trump told The New York Times he understood voter frustration with gas prices. Vice President JD Vance posted on social media the next day, citing the war as the reason for the election loss.

If a deal to end the war is reached, market reaction could be swift. Jaime Brito, executive director of refining and oil markets for Dow Jones Energy, said traders would look for formal announcements that the strait is reopening and that military forces are withdrawing. If those conditions are met, Brito predicts crude prices could drop by $15 to $20 per barrel within two to three days of the announcement.

The drop at the pump will take longer. Ships currently taking longer routes around the strait must return to their original paths, potentially causing traffic bottlenecks. That crude oil then requires refinement before it reaches consumers. Brito estimates the most optimistic scenario for gasoline and diesel returning to prewar levels is three months after a ceasefire. Jorge León, head of geopolitical analysis at Rystad Energy, estimates it will take six months for crude to normalize, plus another one or two months for retail fuel prices to follow. Both experts noted that complications could stretch the recovery timeline to a year.

Other factors may delay price reductions. Attacks on Russian refineries by Ukraine could keep diesel prices high, as Russia supplies a large portion of global diesel. U.S. refineries are already operating above 90% capacity, leaving little room for error if maintenance issues arise. Additionally, freight costs and insurance premiums for oil transport have risen due to the longer routes and higher risk. Brito wrote that a definitive end to the conflict is required for normal prices to return, noting that expensive gasoline could become the new normal if hostilities persist.