BAKERSFIELD, Calif. (KERO) — A deal between the U.S. and Iran is easing fears of major disruptions to the global oil supply. While that's good news for drivers, economists say it could still take months before any significant relief shows up at the pump.
Local economist Aaron Hegde says while oil prices have fallen from their wartime highs, much of the fuel already sitting in gas stations was purchased at higher prices. He also points out that higher demand for fuel during summer months will likely keep prices from dropping too far.
"So we might see it down to like 5.30 - 5.20 or something, so maybe like a 10% decrease, but not a whole lot more until probably later in the summer or early fall," Hegde said.
Hegde says another factor is uncertainty. Even with the agreement in place, markets are still waiting to see whether the deal holds and whether tensions remain low in the months ahead.
"So who knows what's going to happen 60 days from now, right? So that's why you don't see the market reacting the way it did in the past when there was a likelihood of peace," Hegde said.
Beyond the pump, lower energy costs could eventually help ease inflationary pressure across the economy. Transportation costs for businesses could decline, and Hegde says some travel expenses, including airline tickets, may become more affordable. Still, he says those changes will likely happen gradually rather than all at once.
"So you will see the gas prices come down. But again, I think it's much slower than the rise up in the prices were. And also because of the uncertainty, you'll see prices come down, and if it looks like the peace is not lasting, they'll start going back up again," Hegde said.
While the deal is a positive sign for energy markets, experts say patience will be key. Any meaningful drop in gas prices is expected to happen gradually, not overnight.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
Stay in Touch with Us Anytime, Anywhere:
