Oil prices plunged Friday after Irans foreign minister announced that the Strait of Hormuz is completely open for commercial ships for the rest of the ceasefire.
President Trump later said that Iran agreed to never close the strait again, though Iranian media reports officials there dispute that claim, as well as some other details of the straits reopening.
Still, global oil markets are responding.
“Oil prices are crashing by over 10%,” said GasBuddy’s Patrick De Haan.
That’s a huge decline, but the price of oil is still well above its pre-war level.
International leaders meeting in Paris cautiously embraced the news.
We welcome the announcement that was made during our meeting, but we need to make sure that this is both lasting and a workable proposal, said UK Prime Minister Kier Starmer.
RELATED STORY | Trump signals Iran deal is near as Strait of Hormuz reopens
In the U.S., the average price for a gallon of gas is now $4.08. Thats down eight cents from last week, but still up over 35% from before the war.
Experts say a reopened Strait of Hormuz could bring long-awaited relief to Americans at the pump.
“I expect over the week and the national average could fall below the $4 gallon mark again,” De Haan said. “And ultimately in another week or two, we could see the national average falling to $3.85. The decrease could be five to 15 cents every week or two, for the next few weeks.”
But travelers flying this summer are still set to face higher prices, with airlines increasing fares due to higher jet fuel costs.
“This probably still will affect airfares for the next month or two until jet fuel prices completely normalize again,” De Haan said. “I think airfares will probably remain elevated for most of the summer before we start to see some relief in fall.”