When Will US Fuel Prices Fall if Peace with Iran Is Achieved?
There is good news for motorists in the United States. Fuel prices are predicted to continue decreasing following the achievement of a tentative agreement between US and Iranian officials to end the armed conflict that has lasted for the past four months.
Through a social media post on Sunday (15/06/2026), President Donald Trump stated that the deal with Iran has been finalised. Reports from the Wall Street Journal also confirmed this statement via Iranian government sources. This announcement immediately triggered market optimism, marked by surging stock market futures and a drop in global crude oil prices.
“World ships, start your engines. Let the oil flow!” Trump wrote in his Truth Social post. Since the conflict broke out nearly four months ago, shipping traffic through the Strait of Hormuz—a vital artery for the world’s oil supply—had almost come to a complete standstill.
Although petrol prices are expected to soon drop below the psychological threshold of US$4 per gallon (approximately Rp62,000), energy experts are warning consumers not to expect drastic price reductions in the short term.
Experts often refer to this phenomenon as ‘rocket and feather’. This means that petrol prices tend to soar quickly like a rocket during a crisis, but descend slowly like a drifting feather when the situation improves.
Based on AAA data on Monday (16/06/2026), the national average petrol price stood at US$4.06 per gallon. Meanwhile, GasBuddy data showed a slightly lower figure of US$3.99 per gallon. By comparison, the average price one month ago was US$4.52, significantly higher than last year’s price of just US$3.13 per gallon.
Pavel Molchanov, a senior investment strategist at Raymond James, explained that a drop in crude oil prices usually takes one to two weeks to be reflected at retail petrol pumps. Conversely, an increase in oil prices only takes three to five days to raise prices for consumers.
“The signing of the agreement is not the end of everything. It is rather the beginning of a long logistical process to restore the oil supply from the Persian Gulf,” said Molchanov. He predicts the national average will fall to US$3.90 within the next one to two weeks.
Patrick De Haan, head of oil analysis at GasBuddy, provided an optimistic projection that the national average could reach US$3.75 per gallon by the Fourth of July celebrations. However, he noted that the intensity of the late summer storm season could be a major variable that changes the situation.
In addition to petrol, diesel prices are also beginning to show a downward trend. This provides a breath of fresh air for the macroeconomy, as diesel is the primary fuel for logistics trucks that distribute goods to retail stores.
Nevertheless, analysts doubt that petrol prices will return to pre-war levels (around US$2.98 per gallon) in the near future of 2026. Andrew Lipow, president of Lipow Oil Associates, stated that such low prices would only be possible if the world experienced a severe recession that triggered a drastic drop in demand.