Oil Prices Plummet as US and Iran Reach Provisional Peace Deal

Oil prices plummeted in the hours after the United States and Iran agreed to a provisional peace deal that would open up the Strait of Hormuz – welcome news for U.S. consumers who’ve endured soaring gas prices since the war started on February 28.

Gas prices should tick down because of it, GasBuddy Head Petroleum Analyst Patrick DeHaan said in a post on X Monday, and consumers might be in for big savings at the pump by next month.

“The next few days will be key to see if the agreement sticks, and if traffic begins moving in the Strait,” DeHaan wrote. “Beyond that, the national average could fall below $3.75/gal by July 4, under a[n] optimistic timeline.”

Hurricanes can trigger volatile oil prices, too, according to energy commodity pricing and news service Opis.

“Gulf Coast refinery disruptions and fuel price volatility are just a sliver of the massive repercussions that can stem from hurricanes,” the company noted. “Storms of this magnitude can disrupt major oil refineries and wildly rattle supply and demand when it comes to gasoline and diesel.”

Gas cost an average of $2.98 two days before the war. When the United States attacked Iran on February 28, the Strait of Hormuz, which sees 20 percent of the world’s oil supply pass through it, became too dangerous for ships to pass through.

Oil shipping ground to a halt, oil prices rocketed upward and gas prices followed. By the first week of April, U.S. consumers were paying more than $4 a gallon for the first time since August 2022.

At one point in early May, JPMorgan Chase & Co. analysts warned that if the war continued, gas prices could pass $5 a gallon.

That scenario has yet to transpire, but, in the meantime, consumers have paid $59 billion more for gas this year since February 28 than they did in 2025.

While DeHaan said the peace deal is a promising sign, any changes to it in the coming days could send fuel prices upward again after three straight weeks of decline.

“The next several weeks will be key – one major slip up could impact greatly prices moving forward,” he wrote on X. “And with so many speedbumps in this situation, it may be foolish to think this problem is now completely over. Time will tell.”

Consumer struggles did not seem to bother President Donald Trump. On multiple occasions, he said his focus was on preventing Iran from developing and launching nuclear weapons, not the cost-of-living struggles consumers were facing.

Voters have grown frustrated over how Trump has handled the nation’s affordability woes. Some 63 percent of Americans disapprove of the way Trump has handled the economy, according to a poll from The Economist/YouGov.

Low ratings have sent alarm bells ringing through the Republican party just months before voters cast ballots to elect new Congressmembers. Republicans have control of the House and Senate, but the economy’s struggles may change that in November.