Oil Drops 5% on US-Iran Deal, but Gas Prices Face Slow Descent to $3.75

West Texas Intermediate crude futures fell 4.8% to $80.75 per barrel on June 15, 2026, after President Trump announced completion of a peace agreement with Iran, reopening the Strait of Hormuz—a chokepoint for 20% of global energy transport. However, analysts warn U.S. gasoline prices will decline gradually due to the "rockets up, feathers down" phenomenon in retail fuel markets. U.S. average gas prices stood at $4.06 per gallon (AAA) on June 16, down from $4.52 a month prior but still 30% above year-ago levels of $3.13. GasBuddy's Patrick De Haan projects a best-case scenario of $3.75 by July 4, contingent on deal stability and hurricane season severity. Raymond James' Pavel Molchanov estimates $3.90 within two weeks, citing a typical 7-14 day lag for crude price drops to reach pumps—versus 3-5 days for increases. Large-volume retailers Costco (COST) and Walmart (WMT) are expected to cut prices faster than independent stations, benefiting from daily fuel deliveries. Costco reported record gas station demand in its latest quarter. Analysts dismiss a return to pre-conflict $2.98/gallon levels, noting such pricing would signal recession.