U.S.-Iran peace deal could lower gas, farm costs, but relief may take time

LITTLE ROCK (KATV) — A proposed agreement to end the conflict between the United States and Iran is raising hopes for lower fuel and commodity prices, though economists said it could take weeks or months before Arkansas consumers see significant savings.

President Donald Trump said Monday that the conflict could soon be “in the rearview mirror” and praised Iranian negotiators, while Iranian officials have also expressed optimism about the agreement, which is expected to be formally signed on Friday.

A key component of the deal involves reopening the Strait of Hormuz, one of the world’s most important shipping routes for oil and other commodities.

Experts said restoring normal traffic through the waterway could help reduce energy costs that have risen during the conflict.

Michael Pakko, chief economist and state economic forecaster with the Arkansas Economic Development Institute, said the strait plays a critical role in global energy markets.

“About 20% of all the crude oil production in the world travels through the Strait of Hormuz,” Pakko said.

The disruptions have affected more than gasoline prices. Arkansas farmers have also faced higher costs for fuel, fertilizer and transportation, according to Tyler Oxner, director of commodity activities and economics for the Arkansas Farm Bureau.

“We have to utilize the fertilizer and oil that’s on a global scale, and so when those prices go up to those conflicts over there, we see those prices here on the farms as well,” Oxner said.

Pakko said oil markets have already responded positively to news of the agreement, even before it has been finalized.

“Even though the agreement has not even been signed yet, we’ve seen oil prices worldwide come down significantly,” he said.

Nationally, gasoline prices have fallen in recent weeks. Fuel prices are down about 14 cents per gallon from a week ago and 47 cents from a month ago, according to figures cited during the announcement of the agreement.

However, Pakko cautioned that lower oil prices do not automatically translate into immediate savings for consumers. Shipping routes must fully reopen, supply chains need time to recover and negotiations remain ongoing.

Farmers are particularly hopeful that lower energy costs arrive before harvest season, when fuel expenses typically increase.

“Hopefully, with these peace talks remaining and staying intact, we’ll be able to see lower fuel costs when it comes to harvest time, when they’ll need it most,” Oxner said.

For Arkansas drivers, any decrease in gas prices would be welcome.

“Gas prices have really been high, especially when I’m filling up one of these,” driver Scooter Register said. “It’s expensive, so I’d like to see gas prices come down.”

Economists said energy prices are likely to remain volatile as negotiations continue.

Still, if the agreement moves forward as planned, they expect fuel costs to trend lower over the coming months, potentially providing broader relief for consumers, farmers and businesses across Arkansas.