Energy & Environment

Ceasefire may bring modest respite at the pump

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by Rachel Frazin - 04/10/26 6:00 AM ET

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by Rachel Frazin - 04/10/26 6:00 AM ET

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This week’s drop in oil prices following the Iran war ceasefire could bring some modest respite for consumers at the pump — if the truce holds.

However, analysts also say that even in the long term, Iran may not want to give up its leverage over a key oil choke point, the Strait of Hormuz, which could keep consumer prices higher than they were before the war started on Feb. 28.

Oil prices dropped dramatically after President Trump announced a ceasefire with Iran late Tuesday night.

Prices of U.S. benchmark West Texas Intermediate crude were down about 17 percent on Wednesday morning to about $91 per barrel. As of Thursday afternoon, prices were up somewhat, trading at around $97 per barrel, but still down significantly from the high prices that were seen ahead of the ceasefire, as Trump threatened to obliterate Iran.

Andrew Lipow, president of consulting firm Lipow Oil Associates, said Wednesday that consumers may soon see lower gasoline prices.

“I think that, given the magnitude of the price decline today, we will see some minor relief at the pump by Saturday, but I’m certainly not looking for prices to go back to their preconflict level,” Lipow said.

“If the ceasefire were to hold, we could see the national average dip below $4 a gallon, you know, in the next few weeks,” he added.

On Thursday, the average U.S. gasoline price was about $4.17 per gallon, up more than $1 since the war with Iran started.

But Lipow held firm to his assessment in a follow-up email Thursday.

“Gasoline futures were down about 30 cents yesterday, today they are up 9 cents,” he wrote.

Patrick De Haan, head of petroleum analysis at GasBuddy, wrote Thursday on the social platform X that many states were already seeing declines in gasoline prices. He added that many states “should see some nice drops over the weekend (if things hold as is).”

But other experts were skeptical about relief for consumers.

Clayton Seigel, senior fellow with the Energy Security and Climate Change Program at the Center for Strategic and International Studies, told The Hill that in the case of a ceasefire, he wouldn’t really expect gasoline prices to fall on that basis alone.

“We will have less oil than before,” and so “that will keep pump prices somewhat elevated,” he said in an interview Monday.

Gas prices “go up like a rocket and down like a feather,” he added. “Even when the conditions are in place for gasoline prices to begin receding, it takes a frustratingly long time for them to come back down after a spike like this.”

Oil costs and prices of gasoline, which is made primarily from oil, have surged since the war started largely because of the closure of the Strait of Hormuz, a key oil shipping lane off Iran’s coast.

The country has threatened to attack ships trying to pass through it — sending oil markets into chaos. The country has since announced a toll system in which it allows a few boats through for a fee.

The Trump administration has said the ceasefire is conditioned on Iran allowing free passage through the strait, while Tehran has signaled that it will still try to exert control over the waterway.

Seigel said Iran may never fully give up its control over the Strait of Hormuz, through which about a fifth of the global oil supply typically travels.

“If there is some kind of deal, it’s just a new normal where I don’t think the strait will operate for energy exports like it did before the war. … I think that we’re in uncharted territory here that will keep energy exports at risk on a semipermanent basis,” he said.

“Iran has discovered and acted on this newfound leverage” to put the world’s economy in a “choke hold,” he said. “Why would it relinquish that in the future?”

Lipow similarly said: “My opinion is that, yes, Iran is going to attempt to control movements through the strait by acting as a tollbooth and collecting fees from vessels that want to transit the waterway.”

Meanwhile, uncertainty over whether lasting peace will actually be reached also looms large. Shortly after the announcement of a ceasefire, Israel continued its bombing campaign on Lebanon and inflamed tensions.

U.S. and Israeli officials have said that Lebanon was not part of the agreement, but Iran has indicated it would shut down the strait in response.

Talks between Washington and Tehran are expected this weekend.

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