Even if the Iran war ended today, US fuel prices aren’t likely to normalize this year
Even if the Iran war ends, US fuel prices are unlikely to return to pre-war levels this year due to infrastructure delays and supply chain disruptions.
The ongoing Iran-Israel conflict is preventing a quick return to pre-war fuel prices in the US. Repairing damaged energy infrastructure and clearing supply chain bottlenecks will take considerable time, potentially extending price normalization to several months or even years.
Imagine you’re building a LEGO castle, but the parts are stuck in a faraway country because of a war. It’s going to take a long time to get the parts back, and even then, it’ll take more time to build the castle. That’s what’s happening with gas prices – the oil is stuck, and it takes a long time to turn it into gas. Even if the war ends, it will still take months or even years for prices to go back to normal. Also, different types of gas – like gasoline and jet fuel – are affected differently because of how the oil is processed and used. If the war ends, it could take a long time to get everything back on track.
Analysis
According to energy experts, even if the Iran war ended today, US fuel prices aren’t likely to normalize this year. The process of turning crude oil into usable fuel is complex and time-consuming, involving transporting oil from the Middle East, refining it, and distributing it to market. As the Guardian reports, ‘checking potentially damaged energy infrastructure in the Middle East and unsnarling supply chains takes time.’ The International Energy Agency estimates that approximately 25% of global seaborne crude-oil trade transits the Strait of Hormuz, amounting to 20 million barrels a day. This oil has been kept off the market due to the conflict. It takes 30 to 60 days to turn a barrel of crude oil into fuel, and even if the conflict ended tomorrow, it would take at least three to five weeks to clear the backlog of traffic stuck in the Gulf and reposition ships. Energy experts estimate that industry estimates are wide for how long it would take for fuel prices to return to prewar levels, anywhere from six months to two years. "You’re basically riding a bicycle on water," says Denton Cinquegrana, chief oil analyst at Dow Jones Energy, referring to the slow speed of the oil tankers that transit the Gulf. "For retail prices to drop $1.50, I think we could kiss that number goodbye for 2026," he adds. Furthermore, the conflict has impacted various fuel types differently. Gasoline and diesel prices remain near their highs, while jet fuel prices have come off recent highs due to concerns about availability and the impact of higher costs on airline bookings. "I don’t even predict what next week’s going to be because of headlines," says Patrick De Haan, head of petroleum analysis at GasBuddy.
Key points
- The Iran-Israel conflict is disrupting global oil supply chains.
- Turning crude oil into usable fuel takes 30-60 days.
- Repairing damaged infrastructure and clearing supply bottlenecks will delay price normalization.
- Different fuel types (gasoline, diesel, jet fuel) are affected differently.
- Seasonal influences and demand could further impact fuel prices.
