This story was originally published on MyNorthwest.com
Relief is in sight for drivers stung by weeks of soaring gas prices, but analysts warn it won’t come overnight.
Oil prices plunged Friday after Iran declared the Strait of Hormuz is “completely open” to commercial shipping during a 10-day ceasefire between Israel and Lebanon.
Despite the drop in crude, prices at the pump have yet to catch up. The national average for a gallon of regular gasoline remains above $4, and in the Seattle area, the average is still above $5.50 a gallon.
Patrick De Haan, head of petroleum analysis at GasBuddy, said drivers should begin seeing some relief starting this weekend as wholesale price declines filter through to retail stations. He predicted the national average could fall below $4 within days and drop to roughly $3.85 within the next week or two.
But he cautioned that it could take months for prices to return to pre-conflict levels. Before the U.S. and Israel launched military strikes on Iran on Feb. 28, the national average stood at about $2.98 a gallon.
For Seattle-area drivers budgeting for the rest of the month, De Haan said prices should start ticking down soon, but don’t expect a return to pre-war levels anytime soon.
Oil prices drop 9% and Wall Street rallies to a record after Iran reopens the Strait of Hormuz
Oil prices dropped back to where they were in the early days of the Iran war, and U.S. stocks raced to another record Friday after Iran said the Strait of Hormuz is open again for commercial tankers carrying crude from the Persian Gulf to customers worldwide.
The S&P 500 leaped 1.2% to an all-time high and closed out a third straight week of big gains, its longest streak since Halloween. A freer flow of oil could take pressure off prices not only for gasoline but also for groceries and all kinds of other products that get moved by vehicles. It could even ultimately help people pay less on credit-card interest and mortgage bills.
The Dow Jones Industrial Average surged as many as 1,100 points before paring its gain to 868, or 1.8%. The Nasdaq composite climbed 1.5%.
The U.S. stock market has jumped more than 12% since hitting a bottom in late March on hopes the United States and Iran can avoid a worst-case scenario for the global economy despite their war. Friday’s reopening of the Strait of Hormuz, which may only be temporary, is the clearest signal yet for optimism, and President Donald Trump said late Thursday that the war “should be ending pretty soon.”
The price for a barrel of benchmark U.S. crude plunged immediately after Iran’s foreign minister, Abbas Araghchi, posted on X that passage for all commercial vessels through the strait “is declared completely open” as a ceasefire appears to be holding in Lebanon. He said it would stay open for the remaining period of the ceasefire, and the price for U.S. oil dropped 9.4% to settle at $82.59 per barrel.
Brent crude, the international standard, fell 9.1% to settle at $90.38 per barrel. To be sure, it remains above its $70 price from before the war, indicating some caution is still embedded in financial markets.
Contributing: The Associated Press
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