Trump-Iran Breakthrough Sends Oil Crashing, Stocks Surging – When Will Gas Prices Drop?
Oil markets tumbled Monday after President Trump announced that the United States and Iran had reached an agreement to reopen the Strait of Hormuz, easing fears of a prolonged disruption to global energy supplies and fueling a rally on Wall Street.
Brent crude fell 4.8% to $83.17 per barrel, while West Texas Intermediate dropped 5.2% to $80.46. During early trading, US crude briefly slipped below $80 a barrel for the first time since March.
Although prices remain above the levels seen before the outbreak of hostilities in the Middle East, both benchmarks have now retreated to their lowest points in three months. The decline comes after oil had surged to as much as $126 a barrel at the height of the conflict.
President Trump announced the development Sunday on Truth Social, declaring: “The Deal with the Islamic Republic of Iran is now complete.”
He added: “Congratulations to all! I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!”
The Strait of Hormuz, through which roughly one-fifth of the world’s oil supply passes, is expected to resume normal operations on Friday when officials formally sign the agreement in Switzerland.
Investors reacted enthusiastically to the prospect of restored energy flows. US equities climbed sharply Monday morning amid expectations that the crisis, which triggered the most severe energy supply disruption in modern history, may soon come to an end. The disruption had driven gasoline prices above $4 per gallon and reignited inflation concerns.
By approximately 9:45 a.m. Eastern Time, the Dow Jones Industrial Average had gained 517 points, or 1%. The S&P 500 advanced 1.5%, while the Nasdaq jumped 2.4%.
According to AAA, the national average price for gasoline stood at $4.07 per gallon on Monday. That figure represents a 10% decline from one month ago, although it remains about 36% higher than before the conflict began.
Energy analysts note that retail fuel prices generally take one to two weeks to reflect changes in crude oil markets. Administration officials have argued that motorists should begin seeing meaningful relief soon after shipping traffic fully resumes through the strait.
At the same time, experts caution that restoring global energy markets could be a lengthy process. Significant damage to infrastructure throughout the region, along with reduced petroleum reserves, may continue to affect supplies for months.
“Within two weeks, if it stays open and the deal looks stable, we can expect the national average to drop to mid-high $3 range,” Joe Adamski, managing director of ProcureAbility, a supply chain consultancy, told The Post.
“But the rest will take much longer. It will take up to six months for tanker traffic flows to reach normal; demining and facility repairs will take anywhere from six months to two years, that we don’t know until full assessments can be done.”
Pakistan’s Prime Minister Shehbaz Sharif also confirmed the agreement, announcing the development on X.
“Both sides have declared the immediate and permanent termination of military operations on all fronts,” he wrote.
{Matzav.com}
