The Iran war may end but high oil prices may not

With the United States and Iran arriving at a “memorandum of understanding” to end hostilities, President Donald Trump seems to think petroleum prices will come down immediately. “Let the oil flow!” he wrote on social media. But while average gas prices did fall just below $4 per gallon after the deal was signed, economists say extended relief from high prices could take much longer to arrive.

Drivers might expect that gas prices will start to lower as soon as the deal with Iran is inked, but they “will probably have to wait weeks, or longer, to see meaningful improvement,” said The New York Times. Gas prices often fluctuate in an “up like a rocket, down like a feather” manner, meaning “gasoline costs quickly rise alongside the price of crude oil but are slow to follow its descent.” Gas stations tend to lose money when the price of gas goes up, so when oil starts to “go down, station owners are slow to bring retail prices down to make up for their poor financial performance on the way up.”