Deal on Iran war sparks slow price return

why prices – A tentative U.S.-Iran deal has helped push oil prices lower, but economists and industry analysts warn consumers won’t see quick relief at the pump, in grocery aisles, on flights, or through shipping and retail pricing—because supply chains take months to unwi

When a tentative deal to end the Iran war hit the headlines, oil prices slid Monday. Yet for people buying gasoline, groceries, airline tickets and everyday goods, the adjustment is likely to be measured in weeks—or longer—because the disruptions from the fighting didn’t stop all at once.

Even if oil starts flowing again through the Middle East. economists and industry analysts say the effects will take time to reach local fuel pumps and supermarket shelves. The Strait of Hormuz conflict didn’t only disrupt crude and refined fuel supplies; it also interfered with supply chains for fertilizer. food and even footwear. Businesses are bracing for higher costs to linger, which means consumers may have to do the same.

Brett House. an economist who teaches at Columbia Business School. said the arithmetic is not reassuring even after months of war. “It is not clear. despite three months of war. that anything has been achieved that makes the American consumer better off. ” he said. “In fact. by almost any measure. not just the American consumer. but the world. is worse off as a result of this attack.”.

With the deal still tentative, here is what experts say to expect—and what not to expect—in the weeks ahead.

US motorists can expect some gas price relief, but not instant

After news of the tentative agreement, oil prices fell Monday to about $80 for a barrel of U.S. benchmark crude. Before the war, the price was $67 a barrel, and earlier in the conflict it climbed to more than $120 a barrel.

But even when crude gets cheaper, gasoline doesn’t automatically follow on the next day. Refineries typically pay for crude oil a month or more in advance. so they won’t immediately be processing cheaper products. “The tendency of gasoline prices to fall slowly is partly because the raw material takes weeks to work through the system until it’s delivered to consumers. ” said Michael Lynch. a distinguished fellow at the nonpartisan Energy Policy Research Foundation.

Where refining capacity is tight, the lag could be longer. Mark Barteau, a professor of chemical engineering and chemistry at Texas A&M University, said in places without enough refining capacity—such as the West Coast of the U.S.—gas prices will take longer to drop.

Outside the U.S., the disruption has already reached deep into daily life. In some Asian and African countries that rely more on oil from the Middle East, the supply shock led to school and government office closures and instructions to work from home, according to the International Energy Agency.

Barteau put the recovery in plain terms: “The bottom line is that getting back to ‘normal’ will be a lengthy process involving many parties and countries. Getting an agreement between the U.S. and Iran to open the strait is just the beginning.”

Flights won’t get cheaper right away even if fuel does

Airfare is one of the hardest places to find fast relief. Industry experts have warned for months that even if the war ended, travelers shouldn’t count on airfares dropping immediately.

Airlines buy fuel in advance, adjust schedules gradually, and price tickets based heavily on demand. That means lower oil and jet fuel prices can take weeks or months to make their way into commercial flight costs.

“I think it’s unlikely that we’re going to see a retreat or reduction in the cost of flying at any point this summer,” House said.

Still, there may be one early pocket of improvement. Fuel surcharges that some airlines outside the U.S. added could be where passengers notice a reprieve first. said Gordon Ho. a professor at the University of Southern California’s business school. “Consumers are going to say, ‘Wait a minute, why are you still charging me a fuel surcharge?’” Ho said.

Grocery prices may keep pushing higher as the shock ripples through food

For shoppers, the trip from oil markets to grocery shelves is even slower. David Ortega, a professor of food economics and policy at Michigan State University, said reopening the strait is unlikely to deliver instant relief at the grocery store.

Fuel’s role in food costs is significant but not always obvious: fuel accounts for roughly 15% to 30% of the total cost of food, according to the Independent Grocers Alliance, a grouping of 7,500 global supermarkets.

Ortega said it can take months for an energy shock like the one caused by the Iran war to move through food supply chains and raise grocery prices. Once prices rise, they also tend to take a long time to come back down—especially when the future is still uncertain.

“We’re likely still looking at inflationary pressure on food in the coming months,” Ortega said. “There’s still a good deal of uncertainty about how the reopening will unfold, and it will take time for fuel, diesel and retail fertilizer prices to come back down.”

Rabobank, based in the Netherlands, said it expected war-related food price inflation to peak sometime next year in Europe. In the U.S., grocery prices are expected to rise 3.2% this year, compared with a historical average of 2.6%, according to the U.S. Department of Agriculture.

Farmers remain strapped for fertilizer even after the strait reopens

Reopening the Strait of Hormuz would be a welcome change for farmers and for global food production, but the fertilizer bottleneck is not one that clears quickly.

Before the war began, roughly 30% of the world’s fertilizer passed through the waterway. When the strait was disrupted, fertilizer supply effectively got cut off, and prices soared.

Even if shipments resume, the path back to pre-war levels will be slow. Shipments probably will take a long time to return to pre-war levels.

The impact may intensify rather than fade. Many farmers around the world are already dealing with planting seasons without the fertilizer they need or paying sky-high prices for both fertilizer and the fuel required to produce and transport crops. The World Food Program of the United Nations expects this to have a “devastating impact” on crop yields—and consequently. food prices and the availability of food—for months to come.

Retailers don’t expect a cost reprieve for shoes and other goods

Gas prices falling is supposed to give consumers a bit more breathing room. U.S. retailers that sell shoes were encouraged by the idea that cheaper fuel could mean Americans have more money to spend on back-to-school shopping. said Andy Polk. senior vice president of the Footwear Distributors and Retailers of America trade group.

But shoe companies don’t appear ready to pass savings to customers quickly. Polk said retailers expect their own costs to stay higher for the foreseeable future. The group’s members keep a two- to three-month inventory of finished products. but their next orders may include suppliers charging more for materials.

Most footwear sold in the U.S. is imported, and Polk expects shipping costs to remain higher for the rest of 2026 and 2027. U.S. tariffs imposed last year also make it harder for shoe sellers to absorb higher costs or pass them on to customers. he said. In May, footwear prices were 5.2% higher than the same month a year earlier, according to government figures.

Shipping recovery could be slow, and consumers may feel it through shortages and higher costs

Global shipping is another channel where delays accumulate. Judah Levine. head of research at the freight booking platform Freightos. said closure of the Strait of Hormuz affected about 2% to 3% of the total volume of container ships used for global shipping. But he said higher oil prices and broader disruption have hit the shipping industry more widely.

Josh Steinitz. chief strategy officer of the business logistics platform ShipStation Global. said consumers might notice higher shipping costs and more out-of-stock items online until the end of the year. He also warned that fuel charges don’t disappear neatly once a political deal is announced. “I think fuel surcharges. which then flow into shipping costs. which then get passed along to consumers. are still going to be with us for quite sometime from many of the major carriers. ” Steinitz said.

Taken together, the facts point in the same direction: a deal can move oil markets in a single day, but the prices consumers pay are tied to contracts, inventories, shipping routes, refining schedules and supply chains that take months to reroute—and in some cases, only partially return.

Iran war Strait of Hormuz oil prices gasoline airfares fuel surcharges grocery prices fertilizer World Food Programme shipping costs footwear prices Freightos ShipStation Global