New Congress Faces Barriers to Lowering Post-War Fuel Costs
While a Democratic takeover of Congress offers some levers to end the Iran conflict, experts warn that supply chain delays could keep gas prices high for up to a year.
By Jillian Foster ·
Fuel costs have become a central issue in American politics following the war in Iran, which disrupted global oil flows and pushed prices to historic highs. The surge in energy expenses helped drive voters to elect a majority of Democrats to both chambers of Congress, a shift that now places new pressure on federal leaders to address the economic fallout. Despite this political change, experts caution that the path to lower pump prices is complex and likely to be slow.
The war throttled the Strait of Hormuz, a waterway through which roughly one-fifth of the world's oil previously passed. Brent crude, which cost about $70 per barrel in late February, spent months near $110 and currently sits close to $95. According to AAA, a gallon of gasoline now averages $4.12, an increase of about $1 from a year ago. Diesel prices hit a record high of $6.52 in September and remain roughly $2.50 higher than last year, despite a recent dip.
The incoming Democratic Congress will have limited direct power to control oil prices, which are dictated by global markets. However, they can influence the executive branch. Senate Minority Leader Chuck Schumer stated that Democrats intend to end the war and reduce the cost of living, saying that "relief is on the way." Claudio Galimberti, chief economist at Rystad Energy, noted that a unified Democratic Congress can make military escalation more costly by attaching conditions to war spending and holding back confirmations of key officials.
President Trump retains significant authority over military actions and sanctions, having recently warned Gulf states to prepare for a new campaign after the midterms. The U.S. struck the island of Qeshm in the Strait of Hormuz on Nov. 2. Conversely, Vice President JD Vance attributed the election results to the war, posting on social media that "the reason we lost is the war." These mixed signals create uncertainty for market traders.
Jaime Brito, executive director of refining and oil markets for Dow Jones Energy, estimated that crude prices could drop $15 to $20 per barrel within days of a formal peace announcement. However, gas and diesel prices would lag behind. Ships must return to their original routes, and crude must be refined before reaching consumers. Brito suggested that prewar fuel levels could return in three months, while Jorge León, head of geopolitical analysis at Rystad Energy, predicted a timeline of six months for crude and another month or two for retail fuels.
Additional variables could extend this timeline to a year. The ongoing war in Ukraine continues to affect global diesel supplies, as Russian refineries provide a large share of the world's diesel. Furthermore, freight costs and insurance premiums for oil transport have risen due to longer shipping routes. Brito warned that without a definitive end to the conflict, high gasoline prices may become the new normal.
The new Congress is not sworn in until January, meaning no immediate legislative action is possible. In the interim, the administration maintains full discretionary authority over blockades, licenses, and military strikes. Market watchers are monitoring for formal announcements from both the U.S. and Iran regarding the reopening of the strait and the withdrawal of military presence.
