Strait of Hormuz Reopens: A New Chapter for Oil Prices?

After the US and Iran acknowledged the reopening of the Strait of Hormuz to commercial traffic following nearly seven weeks of conflict, oil prices experienced a steep decline of 10%, causing stock markets to rally on Friday. Motorists remain hopeful for relief at the gas pumps, but experts suggest a gradual decrease in prices.

The current average cost of regular gasoline in the US stands at USD 4.08, reflecting a 37% rise compared to pre-war prices. Despite a slight drop, energy specialists indicate that gasoline prices tend to decrease more slowly than crude oil prices. Factors such as tanker travel speed, refinery operations, and infrastructure damage may extend the time needed for prices to stabilize.

Optimism persists among analysts who believe gas prices might decline gradually, especially following the recent ceasefire agreement. However, they caution that fully normalizing prices could take several months, given the logistical hurdles still affecting oil shipping and production in the Middle East.

(With inputs from agencies.)