Democratic gains in Congress do not mean immediate fuel price relief

A lasting Iran deal could take months to reach gasoline pumps

Fuel prices driven by the war in Iran were a critical driver of Democrats’ midterm gains, according to NPR, which reported the party was poised to take control of Congress by wide margins. Rystad Energy analysts said the incoming majority could pressure Trump on the war but had limited authority to affect oil prices directly, and members of the new Congress will not be sworn in until January.

The price increases followed the war’s disruption of the Strait of Hormuz, through which about one fifth of the world’s oil passed before the conflict. As the war throttled the waterway, Brent crude cost about $70 a barrel in late February, hovered around $110 for months and was close to $95 when NPR reported.

AAA reported that a gallon of gasoline cost $4.12 on average, about $1 more than a year earlier. Diesel reached a record $6.52 in September, then eased from that high but remained about $2.50 more than at the same point a year earlier.

The increases helped major oil companies post huge profits over the past two quarters, according to NPR, while raising the cost of fuel at the pump and the price of nearly everything in a country heavily reliant on trucking. Higher crude prices also fed into the prices of products refined from crude.

Lawmakers have limited powers to affect oil prices directly because a complex global market sets them, and members of the new Congress will not be sworn in until January. In the run-up to the election, most federal government actions to lower fuel prices came from the White House. President Trump loosened rules on dyed diesel, normally a farm fuel, and announced a deal to temporarily lift sanctions and bring more Russian diesel to global markets, including the United States. NPR reported that neither action did much to move prices.

Schumer said Democrats were intent on ending the war and bringing down the cost of living, adding that “relief is on the way.” Claudio Galimberti, chief economist of Rystad Energy, wrote in a market note that a unified Democratic Congress could make escalation considerably more costly. Both chambers could pass resolutions, attach conditions to war spending and withhold confirmations of key officials, he wrote.

Rystad Energy’s Jorge León, head of geopolitical analysis, said President Trump still retained full discretionary authority over military strikes, blockades, sanctions and licenses. Trump also retained veto power over legislation. In recent weeks, Trump warned Gulf Arab countries to prepare for a new military campaign after the midterms, and the United States struck Qeshm on Nov. 2, an island Iran uses to launch its own attacks.

On election night, Trump told The New York Times that he knew voters were unhappy about gas prices. The next day, as the extent of the election result became clear, Vice President JD Vance posted on social media, “The reason we lost is the war.”

Jaime Brito, executive director of refining and oil markets for Dow Jones Energy, said traders could look for formal announcements from Iran and the United States that the Strait of Hormuz was reopening and both sides were pulling back their military presence. If traders were convinced a peace would last, Brito said crude prices could fall by $15 to $20 a barrel immediately, within the next two or three days after an announcement.

Lower pump prices would take longer. Ships that had taken alternative routes around the Strait of Hormuz would have to return to their points of origin and resume their former routes, potentially creating traffic jams, and the crude would still need to be refined and delivered to the market. In the most optimistic scenario, Brito said gasoline and diesel could reach prewar levels three months after a ceasefire or deal was announced.

León estimated a longer route: about six months for crude to reach its prewar level, followed by one or two months for gasoline and diesel, assuming everything went well. Both analysts said hiccups could stretch the recovery for as long as a year after a deal. Brito said, “I don’t want to say this, but, you know, expensive gasoline prices could be a new normal.”

The war in Ukraine could complicate the diesel recovery. If Ukraine continues attacking Russian refineries, diesel may not fall as precipitously as gasoline because Russian refineries normally bring much of the world’s diesel to global markets. Reopening the Strait of Hormuz would help lower diesel prices, but León said it could take longer to return to prewar levels.

Other risks include emergency maintenance at U.S. refineries, which were running above 90% capacity, just as more oil could become available, and the possibility that hostilities would restart. Before the end of the year, Brito wrote, new attacks in the strait were theoretically possible if the administration saw a window to complete unfinished tasks before the new Congress took its seats in January.

The long closure of the Strait of Hormuz also raised the cost of moving oil. Ships taking longer routes burned more fuel, while riskier passage increased insurance costs. If hostilities persisted and freight expenses stayed high, Brent crude could remain elevated for longer. Brito’s bottom line was that hopes for a return to normal prices required a definitive end to the conflict.

Democrats’ control of Congress gives them leverage to press for an end to the war, but the fuel-price outlook still depends on a durable end to the conflict, ships returning through Hormuz and refiners restoring normal output. Until then, analysts said elevated gasoline and diesel prices could last for months, with adverse developments stretching the timeline as long as a year.