A tentative agreement to end the Iran war has raised hopes for lower gasoline, grocery, and airline prices, but experts caution that relief will not come quickly. Even after oil begins flowing again through the Strait of Hormuz, it could take weeks or months for consumers to see a difference at the pump or in stores, according to economists and industry analysts.
The conflict disrupted not only crude oil and refined fuel supplies but also global supply chains for fertilizer, food, and footwear, leaving businesses and consumers facing lingering higher costs.
Following news of the deal, U.S. benchmark crude oil fell to about $80 per barrel, down from over $120 during the war but still above the pre-war level of $67.
Refineries typically pay for crude a month or more in advance, so cheaper oil won't immediately translate to lower gasoline prices. In areas like the U.S.
West Coast, which lack sufficient refining capacity, the drop will take even longer, said Mark Barteau, a professor at Texas A&M University. Some Asian and African countries that rely heavily on Middle Eastern oil faced school closures and work-from-home orders due to the supply shock, according to the International Energy Agency.
Airline tickets are also unlikely to fall soon. Airlines buy fuel in advance and price tickets based on demand, meaning lower jet fuel costs take weeks or months to factor in.
Fuel surcharges added by some non-U.S. airlines may be the first area where passengers see relief, said Gordon Ho of USC's business school.
Grocery prices will remain under pressure. Fuel accounts for 15% to 30% of food costs, according to the Independent Grocers Alliance, and price increases from the war are still working through the supply chain.
David Ortega, a food economist at Michigan State University, said inflationary pressure on food will likely continue for months because of uncertainty about the reopening. Rabobank expects war-related food inflation to peak next year in Europe.
In the U.S., the Department of Agriculture projects grocery prices will rise 3.2% this year, above the historical average of 2.6%.
Farmers face a severe fertilizer shortage. About 30% of the world's fertilizer passed through the Strait of Hormuz before the war.
Prices soared when the supply was cut off, and shipments will take time to recover. Many farmers are going through planting seasons without adequate fertilizer, which the United Nations World Food Program warns could have a devastating impact on crop yields and food availability for months to come.
Retailers, especially shoe sellers, do not expect immediate cost relief. Andy Polk of the Footwear Distributors and Retailers of America said companies anticipate higher costs for the foreseeable future due to inventory cycles and increased supplier prices.
Most footwear sold in the U.S. is imported, and shipping costs are expected to remain high through 2026 and 2027.
The shipping industry also expects a slow recovery. Judah Levine of Freightos noted that the strait closure affected about 2% to 3% of global container ship volume, but higher oil prices and disruption have broader impacts.
Josh Steinitz of ShipStation Global said consumers may notice higher shipping costs and more out-of-stock items online until the end of the year.