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Iran war: Will peace deal allow drivers to see relief at the pump?
After the U.S. and Iran reached an agreement to reopen the Strait of Hormuz, many are hoping the cost of gas will soon drop. FOX 10's Taylor Wirtz learns what could happen now, with prices still nowhere near where they were before the war.
PHOENIX - Many are hoping the agreement between the U.S. and Iran to reopen the Strait of Hormuz will bring some relief at the pump. Gas prices are trending downward, but they are nowhere near where they were before the war.
What we know:
Arizona gas prices have dropped about 41 cents compared to a month ago, according to AAA, but they are still much higher than they were a year ago, averaging about $4.42 per gallon for regular and $5.49 for diesel.
Local perspective:
"A lot of money being spent just for gas, I mean how is everyone supposed to be living day-to-day life?" Arizona driver Angel Silva said.
With U.S. and Iranian officials announcing they have reached a deal to cease hostilities and reopen the Strait of Hormuz, many are hoping it will bring good news for drivers.
"I think it’s good for the economy because oil goes down, everything else, prices hopefully go down," Arizona driver Sri Iyengar said.
What they're saying:
Ed Hirs, an energy fellow at the University of Houston, says if the deal holds up, drivers will see relief, but it is not going to happen overnight.
"It's going to take at least three months to clear the Strait of Hormuz, according to the U.S. Navy. It may take three months to restart the oil wells," Hirs said.
Big picture view:
He says global inventories have been depleted tremendously, with about a billion barrels of oil dislocated from the market. Hirs thinks it could take at least eight months to get back to a stable equilibrium.
"It's real easy to break something in a few seconds. It takes years and years to put it in place," Hirs said.
Hirs adds that because Iran can close the strait at any time, this 60-day window does not guarantee a full resolution going forward. While some drivers are optimistic, others are not convinced yet.
"It’s always up and down, back and forth... I won’t believe it till I see it," Arizona driver Mark Carter said.
What's next:
The U.S. and Iran are set to officially sign the agreement on June 19 to cement the deal, but questions remain as to whether everyone, including Israel, is onboard.
The Source: Information in this report was gathered from AAA, Angel Silva, United States officials, Iranian officials, Sri Iyengar, Ed Hirs, and Mark Carter.