For anyone who has pulled up to a gas pump in the past month, the big question is simple: If the fighting in the Middle East is ending, when will prices drop back to where they were before the war?
The answer, according to economists and oil analysts, is not anytime soon. Prices are unlikely to return to pre-war levels this year—and possibly not for several years, if ever.
In a promising but still uncertain development, Iran has agreed to reopen the Strait of Hormuz, the narrow waterway through which about one-fifth of the world’s oil supply normally flows. While this is a positive step toward ending the conflict, getting global oil markets back to “normal” will be a long and complicated process.
A Logistical Nightmare Ahead
Even if the strait stays open, several major steps must happen before oil production and shipping return to full speed.
First, the backlog of tankers must be cleared. Roughly 128 tankers carrying about 160 million barrels of oil are currently stuck in or near the strait. These vessels move slowly—roughly the speed of a bicycle—so simply getting them out and making room for new ones could take weeks. Analysts at Capital Economics and Kpler estimate that restoring full tanker traffic through the strait could take up to three months.
Second, oil companies will need to draw down the large stockpiles that built up in storage tanks and warehouses while the strait was blocked. Refiners did not completely fill their facilities, which helps a little, but the extra inventory will still slow the return to full production.
Third, restarting oil wells that were shut down during the war is not as simple as flipping a switch. It is a complex engineering task that can take several weeks. Oil reservoirs must be carefully managed to avoid damage. Water and gas that were injected into the wells need to be rebalanced, and because many wells in the region are large and located close together, companies and countries will have to coordinate closely to keep pressure stable across the entire field. Rushing the process could cause reservoirs to collapse, leading to expensive repairs or even the need to re-drill wells.
Fourth, physical damage from the war must be repaired. Refineries, natural gas facilities, and some oil production sites were hit during the conflict. Some of these repairs could take months or even years to complete.
In total, about 12 million barrels per day of crude oil production and 3 million barrels per day of refined products have been offline—mostly in Saudi Arabia and Iraq. Bringing all of that back online will not happen quickly.
Uncertainty Keeps Prices High
Oil prices have already fallen more than 8% in a single day after the announcement, but Brent crude is still trading above $90 per barrel—roughly $20 higher than before the war began. Traders remain skeptical because there have been several false hopes of peace in recent weeks.
Several big questions remain unanswered:
- Will Iran truly stop interfering with ships, or will it continue to control passage and charge fees?
- Will the United States lift its blockade on Iranian oil as part of any peace deal?
- Will shipping companies and insurers feel safe enough to send tankers through the strait? Insurance rates have skyrocketed, and some companies may still demand naval escorts or special permissions before resuming normal operations.
Shipping giants like Hapag-Lloyd have welcomed the news and want to resume passage quickly, but others, such as Maersk, are waiting for clearer details and better insurance terms. Analysts note that if Iran keeps the final say on who can pass, many insurers and shippers will remain cautious.
What Happens to Gas Prices?
Experts say traders may test a new price floor around $80 per barrel, but the market is likely to remain choppy and unpredictable for some time. Futures markets currently project Brent crude averaging around $77 by the end of this year. That is still well above the roughly $60 per barrel level that historically supports $3-a-gallon gasoline in the United States. Most forecasts do not see prices returning to pre-war levels until 2029 or even 2030.
Joe Brusuelas, chief economist at RSM US, put it simply: “Do not expect a return to pre-war prices.”
The longer peace holds and the more clearly production ramps back up, the further prices could fall. However, that depends on many “ifs”—lasting peace, successful coordination among oil producers, safe shipping routes, and repaired infrastructure.
For now, drivers filling up at the pump will likely continue paying higher prices. A full return to normal could be years away, and it will depend on far more than just one announcement about reopening a waterway. The market’s trust in this peace is still fragile, and many factors must align before everyday Americans see relief at the gas station.
