The recent tentative agreement to end the Iran war prompts questions about when prices for essentials like gasoline, groceries, and airline tickets might decrease. Yet, experts caution that the impact may not be immediate. While oil may soon flow from the Middle East, consumers will not see a quick drop in prices at fuel pumps, supermarkets, and other shopping venues.

The conflict affected supply chains for products like food and footwear, leading to continued high costs. As Brett House, an economist at Columbia Business School, noted, outcomes from the war have arguably worsened conditions for both American consumers and the global market.

Gas Prices and Refining Processes

Motorists in the United States might eventually see some relief in gas prices. Following news of the deal, oil prices fell to around $80 per barrel, down from the earlier high of over $120. However, refineries purchase oil well in advance, so cheaper oil won’t immediately decrease gas prices. This delayed effect occurs because it takes time for the supply chain to deliver processed products to consumers, according to Michael Lynch at the Energy Policy Research Foundation.

Regions lacking local refining capacity, like the U.S. West Coast, may experience slower price drops. The International Energy Agency reported school and government office closures in some Asian and African countries relying on Middle Eastern oil due to the supply shock. Mark Barteau from Texas A&M University stated that returning to normal involves multiple parties and countries.

Airline Fares and Fuel Costs

Experts have warned travelers that airline ticket prices might not decrease soon even if the conflict concludes. Airlines purchase fuel in advance, and schedule changes based on demand mean oil price reductions will take time to influence ticket costs. Brett House mentioned the improbability of reduced flying costs this summer. Fuel surcharges might see some early reductions, according to USC’s Gordon Ho.

Grocery and Food Prices

Consumers should not expect rapid relief for grocery prices. Fuel is a significant component of food costs, as per the Independent Grocers Alliance. However, the energy shock’s effect on food pricing is gradual, and inflationary pressures on food persist, says David Ortega from Michigan State University. Rabobank predicts peak food price inflation in Europe next year, while U.S. grocery prices may rise by 3.2% this year, exceeding the 2.6% historical average.

Fertilizer Supply and Farming

Before the conflict, about 30% of the world’s fertilizer passed through the Strait of Hormuz. The shutdown raised prices substantially. Farmers struggle with high costs and shortages, impacting global food production and availability. The World Food Program warns of potential adverse effects on crop yields for months ahead.

Retail Industry and Footwear Costs

U.S. retailers hope declining gasoline prices will increase consumer spending, as noted by Andy Polk from the Footwear Distributors and Retailers of America. However, shoe companies face ongoing high material costs. Tariffs from last year restrict the ability to absorb these costs. Government data indicates a 5.2% annual increase in footwear prices as of May.

Shipping and Global Logistics

The closure of the Strait of Hormuz impacted 2% to 3% of global shipping volume. Yet, higher oil prices and disruptions have broadly affected the shipping industry, Judah Levine of Freightos noted. Josh Steinitz from ShipStation Global highlights the expectation of sustained fuel surcharges and elevated shipping costs affecting consumers through the year.

Contributions from Associated Press writers Cathy Bussewitz, Anne D’Innocenzio, Wyatte Grantham-Philips in New York, Dee-Ann Durbin in Detroit, and Rio Yamat in Las Vegas.