MW Here's when gas prices will go down now that there's a deal to end the Iran war

Andrew Keshner

Gas prices were just over the psychologically significant $4-per-gallon mark on Monday

Get ready to pay less at the pump - but how much less, and when?

Drivers can expect cheaper gas prices in the wake of a deal between U.S. and Iranian officials to end the Iran war.

Although gas prices could drop below the psychologically crucial $4 per-gallon mark soon, drivers shouldn't bank on deeper price cuts coming quickly after that.

Instead, they should prepare for gradual price drops. That's because gas prices tend to shoot up like a rocket and float down like a feather, energy experts say.

President Donald Trump said in a Sunday social-media post that the cease-fire deal with Iran was complete, and the Iranian government confirmed the deal, the Wall Street Journal reported.

Since the conflict started nearly four months ago, shipping traffic through the Strait of Hormuz has slowed to a trickle. The strait is a vital shipping channel for the world's oil supply as well as other cargo.

"Ships of the World, start your engines. Let the oil flow!" Trump wrote Sunday on a Truth Social post as stock-market futures soared and oil prices fell.

The cost of oil contributes to over half the cost of a gallon of gas, according to the U.S. Energy Information Administration.

The national average price for a gallon of gasoline was $4.06 on Monday, according to AAA. Prices had already been sliding in anticipation of a deal. A month ago, the average price was $4.52, according to AAA. A year ago, it was $3.13 per gallon.

A different look at prices from GasBuddy showed a national average of $3.99 per gallon on Monday.

The next couple of days will be critical in determining whether the pact holds up, said Patrick De Haan, head of petroleum analysis at GasBuddy. If signs are good, the national average could "continue to fade," he wrote on X on Sunday in the wake of the peace deal news.

Also read: Oil prices retreat to $80 a barrel after U.S. and Iran agree to a framework for peace

In an "optimistic timeline," the national average price could be $3.75 per gallon by the Fourth of July, he wrote. The extent of hurricane season later in the summer could be a major variable for later this season, he added.

The cost of diesel fuel is also dropping, De Haan noted. That's a win for consumers, because the fuel powers the tractor-trailer trucks and other types of transportation infrastructure that move goods to stores.

The future of gas prices is complicated by other factors that could slow down those price cuts at the pump. On the supply chain, there's damage to Middle Eastern energy infrastructure, as well as cautious insurers that will charge more to cover ships and cargo.

At U.S. gas stations, there's seasonally higher demand for gas during summer, which tends to elevate prices. Gas station owners will be slow to lower prices until they deplete the inventory they purchased at higher prices.

When oil prices increase, it typically takes three to five days for retail gasoline prices to go up, said Pavel Molchanov, a Raymond James senior investment strategist focused on energy.

When oil prices decrease, it takes between one and two weeks for gas prices at the pump to reflect the oil-price move, Molchanov said.

"Once there is a deal signed, that is not the end of the road. That is actually the beginning of a lengthy logistical process of restoring the oil supply from the Persian Gulf," Molchanov said in a Friday interview.

Oil prices have tumbled in the wake of the news. The West Texas Intermediate contract for July delivery (CL.1) (CLN26) has fallen by more than 5% to $80.30 a barrel.

Based on the oil-price drops that have already happened and positive signs that markets were already seeing, the national average gas prices should drop to $3.90 per gallon in the next one to two weeks, Molchanov said. "Anything that happens to the price of oil in the next week or later, that will be reflected at the pump, really, into July," he added.

In early April, prices crossed the psychologically significant $4-per-gallon threshold. Just before the U.S. and Israel attacked Iran in late February, drivers paid $2.98 on average, according to AAA.

Molchanov doubts drivers will see preconflict prices return this year. Others agree that $2.98-per-gallon gas prices won't be back during 2026. And if that did happen, it could be troubling, because it would signal fast-slowing demand, said Andrew Lipow, president of Lipow Oil Associates, a Houston consulting firm.

"The condition for it to happen would be the world goes into recession," because it could not absorb the energy price shock, he told MarketWatch in late May.

Drivers are hoping price cuts materialize sooner than later. Gas costs are important for consumers' moods and budgets. As prices at the pump have gone up, people have put less fuel in their tanks and sought out the cheapest gas, corporate earnings show. Consumers have also dipped into emergency savings to cover higher gas costs.

In addition to the question of when drivers will see lower prices, there's also the question of where that will happen.

The arrival of a tanker truck to refill a gas station's supply is when owners lower their prices, Lipow said. Major gas stations with large volumes get fresh supplies each day, he noted, while smaller stations might get new supplies somewhere between every five and 15 days.

That means big-box retailers and grocers with major gas station operations, like a Costco $(COST)$ and Walmart $(WMT)$, will likely drop their prices faster than smaller retailers, Lipow said. Those large retailers typically already offer cheaper-than-average gas.

Costco became the latest business to win from American's hunt for pump price bargains. The company reported record demand for gas in its most recent quarter.

What personal-finance issues would you like to see covered in MarketWatch? We would like to hear from readers about their financial decisions and money-related questions. You can write to us at readerstories@marketwatch.com. A reporter may be in touch to learn more. MarketWatch will not attribute your answers to you by name without your permission.

-Andrew Keshner

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 15, 2026 10:56 ET (14:56 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.