Following news of the tentative agreement, oil prices fell Monday to $83.89 for a barrel of Brent crude, down from $83.55 at the conflict's peak, compared to $120 per barrel at the conflict's peak and $67-per-barrel before the war. However, experts warn that consumers won't see immediate relief at fuel pumps. According to Michael Lynch, a distinguished fellow at the Energy Policy Research Foundation, "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." Refineries typically pay for crude oil a month or more in advance, so even after oil prices drop, they won't immediately be processing cheaper products. As per Investing.com India, the market appears to be treating the reopening of Hormuz as a reset button, but the reality is more complicated, with consequences likely to remain embedded in inflation expectations and asset prices for months.
Industry experts have warned that airfares won't decrease immediately even if the war ends. Airlines typically buy fuel in advance, adjust schedules gradually, and price tickets based heavily on demand, meaning lower oil and jet fuel prices can take weeks or months to be factored into commercial flight costs. Columbia's Brett House stated, "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." According to Investing.com India, shipping companies, insurers and commodity traders do not make decisions based solely on political announcements - they respond to risk, and many will want weeks, perhaps months, of stability before returning to normal operating levels.
Despite the preliminary agreement, drivers hoping for immediate relief at the pump will likely have to wait weeks or longer for meaningful improvement. Energy analysts refer to the price swing as "up like a rocket, down like a feather" - gasoline costs quickly rise alongside crude oil prices but are slow to follow their descent. The average price of regular gasoline in the United States went up roughly 50 percent between February 28, when the US and Israel attacked Iran, and the middle of May, according to the AAA motor club. The price spiked as most oil shipments were blocked from traveling through the Strait of Hormuz, a vital waterway along Iran's southern coast. As per Investing.com India, a sustained increase in oil prices of $10 or $15 per barrel rarely stays confined to energy markets - it feeds into transportation costs, logistics networks, manufacturing expenses and consumer prices, with central bankers understanding this potential impact on policymaking.
India's packaged consumer goods makers are cautiously optimistic that months of cost pressures may finally begin to ease as crude prices tumble on hopes of a US-Iran peace deal and the reopening of the Strait of Hormuz. Brent crude hovered below $80 a barrel on 17 June after tumbling 15% over the previous four sessions, its longest losing streak of the year, while West Texas Intermediate traded around $77 a barrel. However, any relief is unlikely to reach consumers before September. Parle Products expects lower oil prices to eventually reduce packaging, manufacturing and freight costs, but says the industry is still waiting for prices to stabilize before making any pricing decisions. "We expect the impact to be positive as lower crude prices could help improve consumer sentiment," said Mayank Shah, chief marketing officer at the company. Marico Ltd expects the normalization in the geopolitical environment to lead to relief in crude-linked input costs and global logistics, though the extent and timing of any significant benefit will depend on how fast supply chains stabilize.
Reopening the strait is unlikely to deliver instant grocery store relief, according to David Ortega from Michigan State University. 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 explained that it can take months for an energy shock to wind through the food supply chain and raise grocery prices, and once prices go up, they take a long time to come back down. The US Department of Agriculture expects grocery prices to rise 3.2% this year, which compares to a historical average of 2.6%. Rabobank expects war-related food price inflation to peak sometime next year in Europe. As per Investing.com India, a sustained increase in oil prices of $10 or $15 per barrel rarely stays confined to energy markets - it feeds into transportation costs, logistics networks, manufacturing expenses and consumer prices, with central bankers understanding this potential impact on policymaking.
US retailers anticipate their own costs staying higher for the foreseeable future, despite falling gasoline prices. Andy Polk from the Footwear Distributors and Retailers of America trade group noted that shoe companies expect higher costs to continue, as their 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 US is imported, and Polk expects shipping costs to remain higher for the rest of 2026 and 2027. The shipping industry faces broader disruption, with Judah Levine from Freightos noting that the Straight of Hormuz closure affected about 2% to 3% of the total volume of container ships used for global shipping. According to Investing.com India, Europe and large parts of Asia remain heavily dependent on Gulf energy exports, with higher shipping costs, elevated insurance premiums and persistent supply chain disruptions having the potential to affect industrial output, corporate profitability and consumer spending.
