Gas Prices Stay Above $4 Despite U.S.-Iran Ceasefire, Relief Uncertain

The ceasefire is real, but the $4-a-gallon pain at the pump is not going away anytime soon.

National average gas prices held at $4.16 per gallon Wednesday, according to AAA, barely budging after President Donald Trump announced a Pakistan-proposed two-week ceasefire with Iran on April 7. The figure represents a $1.18-per-gallon increase from the $2.98 Americans paid just before the United States and Israel launched joint airstrikes on Iran on February 28 under Operation Epic Fury, and a climb of more than 70 cents in the single month since fighting began.

The mechanics explain why prices haven't moved. Gasoline futures remain roughly 70 cents above pre-war levels. Hundreds of Very Large Crude Carriers are stranded in the Persian Gulf, and energy infrastructure throughout the region sustained significant damage. Oil must physically move, be refined, and flow through a distribution chain before any crude price drop reaches a station forecourt.

The Strait of Hormuz, which carries roughly 20% of the world's daily oil supply and a quarter of all global seaborne oil trade, was effectively sealed by Iran's Islamic Revolutionary Guard Corps following the strikes. Ship transits collapsed from approximately 130 per day before the war to just six per day at the height of the conflict, removing an estimated 10 million barrels daily from global supply.

Markets responded sharply to the ceasefire announcement. WTI crude fell 16.4% on April 7 to close at $94.41 per barrel, its largest single-day decline since April 2020, while Brent crude dropped 13.3% to $94.75. Both benchmarks remain well above pre-war levels of $67 and $70-$73 respectively. The ceasefire's fragility complicated the picture almost immediately: Iran closed the Strait again on April 8 in response to continued Israeli attacks, and Iran's parliament speaker accused Washington of violating ceasefire terms over a drone incident in Iranian airspace. Prices resumed climbing Thursday. Spot Brent crude remains near $120 per barrel, nearly $30 above futures prices, a gap that signals physical supply remains severely constrained.

Patrick De Haan, head of petroleum analysis at GasBuddy, offered the most optimistic outlook: "Gas prices could start reversing nationally in 48 hours or so, by a few cents every day," he posted Tuesday evening, projecting prices could fall below $4 per gallon within one to two weeks if the ceasefire holds. He cautioned that full normalization "could mean it could take a couple months for gas prices to get back down to normal levels." Diesel, averaging $5.54 per gallon nationally, faces a similar lag.

Henning Gloystein, managing director of energy and resources at the Eurasia Group, offered a more sober timeline. Repairing damaged Persian Gulf infrastructure will take several months, he said, and tankers won't move quickly either. "The voyage from Singapore to the Gulf region takes a tanker about four weeks," Gloystein noted. "Accordingly, these vessels could begin delivering Middle Eastern crude to Asia roughly eight weeks after departing." Jessica Genauer, academic director of the Public Policy Institute at the University of New South Wales, warned prices may not fully recover: "I think we are likely to see that the sort of increase in fuel prices and other types of resources won't go away."

The geographic spread is uneven. Drivers in California, Hawaii, Nevada, Oregon, and Washington are already averaging more than $5 per gallon, while midcontinent states are faring better, though still well above pre-war norms. The IEA coordinated a release of 400 million barrels from strategic reserves; the United States is contributing 172 million barrels from its Strategic Petroleum Reserve, a move that has not yet cooled prices.

Trump, who called the conflict "the 12-day war," acknowledged the underlying difficulty, telling reporters: "We can bomb the hell out of them. We can knock them out for a loop. But to close the Strait, all you need is one terrorist that somehow has a truck loaded" with mines. If the ceasefire fractures again, analysts warn the modest price declines seen this week will reverse fast.