Iran War ceasefire won't lower Long Island gas prices quickly, experts say

Long Islanders will not immediately see relief at the gas pump, experts said, although news of the temporary ceasefire in the war with Iran sent oil prices plunging by 14% Wednesday. 

Average gasoline prices on Long Island hit $4.05 cents Wednesday, more than 41% higher than the $2.86 a gallon price point on Feb. 27, the day before the war started, according to AAA figures. The price per gallon of gas was at $4.03 Tuesday.

Regional experts said the ceasefire won’t result in any rapid or major price decreases, largely because it will take time for Middle Eastern countries to rebuild their oil production and distribution facilities.

Some analysts project it could take upward of three months for oil distribution and supply lines to reach near pre-war levels.

“Our belief is it’s going to take another 12 weeks to return to a bit of normalcy,” said Denton Cinquegrana, chief oil analyst at the Oil Price Information Service, which provides global pricing and analytics for the energy sector. “You’re looking at after the Fourth of July, even.”

Even then, work will have to continue on rebuilding the most damaged areas of infrastructure, Cinquegrana added.

“Restarting facilities could take weeks to months, and the same is true for tankers leaving the Persian Gulf,” said Kevin Book, co-founder and head of research for the independent Washington, D.C.-based research firm ClearView Energy Partners. “Repairing damaged facilities and refilling missing petroleum inventories could take months to years.”

While gas prices remain high nationwide and on Long Island, they remain below records set in recent years.

Local and national gas prices both hit record highs in June 2022 following U.S. sanctions against Russia after its invasion of Ukraine, with average Island prices reaching $5.05 a gallon, and national prices hitting $5.02 per gallon.

Traditionally, average gas prices on Long Island have remained lower than in the state or nation as a result of the Island's access to domestic oil pipelines and shipping ports. While the United States. is a net exporter of oil, producing most of its supplies domestically, oil is priced on a global market, which means disruptions anywhere increase oil prices everywhere, experts said.

“Prices rise like a rocket and fall like a feather,” said Robert Sinclair Jr., senior manager of public affairs at AAA Northeast. “Even if hostilities completely ceased, and that doesn’t look like that’s going to be likely, you still have all this damage that’s left behind, and months if not years to bring all of this back online.”

Trump on Tuesday posted on Truth Social that the ceasefire would include the "immediate" opening of the Strait of Hormuz — a narrow channel through which much of the world’s oil passes through. But by Wednesday, Iran had closed the strait in response to Israel's continued attacks on Lebanon, cutting off the oil shipping route. Iran's leaders also threatened to withdraw from the ceasefire if Israeli strikes persist, The Associated Press reported.

U.S., Israeli, and Iranian strikes have damaged oil and gas infrastructure across the Middle East, pushing up energy prices, according to the AP.

Crude oil barrel prices dropped around 14% Wednesday evening from the day prior to about $96 per barrel, according to Trading Economics, a markets data platform.

Independent oil analyst Tom Kloza said any decreases Islanders see in gas prices will be small and would take time to work their way through the market.

He said it was possible gas prices could ease, but at a rate of fractions of cents over an extended period.

“You’re going to see something — gradually,” he said.