US-Iran peace talks ease market volatility, but uncertainty keeps oil prices high and complicates recovery efforts
Published June 29, 2026
Despite ongoing clashes in the Strait of Hormuz, US President Donald Trump is touting an economic boost as US gas prices begin to fall ahead of potential peace talks.
“Gasoline prices are coming down,” President Trump wrote on his social media platform, Truth Social, on Monday.
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The average price of a gallon of gasoline (3.78 liters) fell to $3.86, according to the American Automobile Association (AAA), which tracks daily fuel prices. This is down from a high of $4.48 in mid-May and has fallen since President Trump announced the reopening of the Strait of Hormuz in mid-June. The price remains well above the $2.98 per gallon recorded on February 28, when the United States and Israel first launched attacks on Iran.
The renewed diplomatic pressure between the United States and Iran comes after several days of back-and-forth attacks, following Iranian attacks on cargo ships in the waterway through which about a fifth of the world’s oil is normally exported.
Uncertainty over the peace deal could weigh on oil supply chains and prevent prices from falling further.
Oil prices rose more than 1% on Monday following the attack, but analysts suggested the resumption of peace talks had curbed the price spike.
“The decline came despite a turbulent week, as fresh strikes were exchanged between the US and Iran before the two sides agreed in time to cease hostilities on Sunday, which prevented a significant jump in oil prices,” said Patrick de Haan, head of oil analysis at Gasbuddy. “…the situation remains unpredictable.”
Analysts told Al Jazeera earlier this month that even if the peace deal holds, it will still take months for prices to return to pre-war levels due to shutdowns and supply chain bottlenecks, as U.S. strategic oil reserves have hit their lowest level since the Reagan administration.
“While the outcome is clear, nothing can change the unsustainable nature of the outages. Having consumed domestic commercial stocks and the SPR (Strategic Petroleum Reserve), the world is now relying on U.S. stocks for balance, extending the timeline for post-crisis stock recovery,” Evercore ISI Research analysts said in an analyst note published Monday.
Despite the uncertainty surrounding a stable ceasefire, companies are still loading tankers. For example, Saudi Aramco loaded a ship capable of carrying 2 million barrels on Monday, after three comparable vessels carried out similar loadings over the weekend, according to LSEG data.
