US EditionOil is plunging, but don't expect $3 gas anytime soon. Here's why
AAA says the average U.S. gas price has risen to $4.16 a gallon, while analysts expect only gradual declines after the ceasefire.
- On Tuesday evening, news of a two-week ceasefire in Iran and potential reopening of the vital Strait of Hormuz sent crude oil prices crashing; the waterway typically handles 20% of the world's oil supply.
- Massive supply disruptions occurred in March, with an estimated 7.5 million barrels per day of crude production from Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, Iraq, and Oman shutting down completely.
- Retail gas prices soared to $4.16 per gallon, according to AAA, up $1.18 since the war began; GasBuddy warns that costs may take one or two weeks to drop to $4, said Jeff Lenard of the National Association of Convenience Stores.
- Despite the ceasefire, uncertainty persists as Iranian media reported Wednesday that Iran closed the strait again following Israeli attacks on Hezbollah in Lebanon, an incident that killed at least 8 people and injured more than 90 others.
- President Donald Trump said on social media Thursday that it is time for Iran to make a deal, while analysts told CNN that returning gas prices to pre-war levels below $3 could take several months.
25 Articles
25 Articles
In the energy sector there is a saying that explains how the price of gasoline behaves: it goes up like a rocket, but it goes down like a feather. In other words, although oil prices collapse in response to the news of the fragile ceasefire reached on Tuesday between the United States and Iran, analysts predict that the price at gas stations will take a while to reflect in the same situation. The price of gasoline has been one of the most obviou…
Oil prices break down in Iran after a ceasefire – but drivers may have to wait weeks or months for much cheaper fuel.
By Chris Isidore and Matt Egan, CNN. Oil futures are plummeting, but it could still be weeks or months before gasoline prices drop dramatically. News of a two-week ceasefire in the war with Iran and a possible reopening of the vital Strait of Hormuz to tankers sent crude prices tumbling between Tuesday afternoon and early Wednesday morning. But even if the war ends—which remains to be seen—the massive disruption to global oil markets is far from…
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