Fuel prices likely to stay high for months despite congressional shift

Gasoline and diesel prices will likely remain elevated for at least three months after a ceasefire is announced, according to energy market analysts. The delay stems from the time required to reroute shipping traffic, refine crude, and distribute fuel nationwide.

The conflict in Iran has disrupted global supply chains, driving up the cost of fuel. Before the war began, roughly one-fifth of the world's oil passed through the Strait of Hormuz. Brent crude prices rose from approximately $70 per barrel in late February to a peak near $110. The price currently sits close to $95. The average price of a gallon of gasoline is now $4.12, which is about $1 higher than a year ago. Diesel reached a record high of $6.52 per gallon in September. It remains roughly $2.50 higher than last year, according to AAA data.

President Trump attempted to lower fuel costs before the election by loosening rules on dyed diesel and temporarily lifting sanctions on Russian diesel. Neither measure produced a substantial drop in prices. Now, with Democrats poised to control both chambers of Congress, leaders plan to use their new leverage. Senate Minority Leader Chuck Schumer stated on Wednesday that the party intends to end the war and reduce the cost of living. He told reporters, "relief is on the way."

Claudio Galimberti, chief economist at Rystad Energy, noted that a unified Democratic Congress can make military escalation more expensive. He explained that both chambers can pass resolutions and attach conditions to war spending. However, the president retains full authority over military strikes and sanctions. Jorge León, head of geopolitical analysis at Rystad Energy, pointed out that the executive branch still controls key levers of the conflict.

The timing of the new Congress adds to the delay. Members will not be sworn in until January. Until then, the current administration may view the coming weeks as a window to complete military objectives. Jaime Brito, executive director of refining and oil markets for Dow Jones Energy, said traders would react quickly to a formal peace announcement. He predicted crude prices could drop by $15 or $20 per barrel within two or three days of such a declaration.

For consumers, the path back to lower pump prices is longer. Ships must return to their original routes through the Strait of Hormuz, a process that could cause logistical bottlenecks. The crude oil then requires refinement and distribution. Brito estimates the most optimistic scenario for prewar gasoline prices is three months after a deal. León suggests it may take six months for crude to normalize, with an additional one or two months for retail fuel prices to follow. Both analysts warn that hiccups could stretch the recovery timeline to a full year.

Additional factors complicate the outlook. U.S. refineries are operating above 90% capacity, leaving little room for emergency maintenance. Meanwhile, the war in Ukraine continues to affect global diesel supplies. Freight costs have also risen because ships must take longer routes around the strait, increasing fuel consumption and insurance premiums. These higher transport costs keep pressure on Brent crude prices. Brito concluded that a definitive end to the conflict is the primary requirement for a return to normal pricing.