Drivers in New Orleans are getting a small break at the gas pump, and there could be more relief ahead depending on what happens with ongoing negotiations involving Iran.
The average price for a gallon of regular gasoline in New Orleans is now about $3.61, nearly four-and-a-half cents lower than it was a week ago, according to GasBuddy fuel expert Patrick De Haan.
The national average is currently about $4.07 a gallon.
De Haan says oil prices have dropped significantly for a second straight day amid discussion of a possible deal that could reopen the Strait of Hormuz, a critical route for global oil shipments.
If an agreement is reached, De Haan says the lower oil prices could eventually translate into lower gas prices.
"That's what I see for now," De Haan said. "The price of oil's plummeted and that will likely open the door for gas prices across not only New Orleans but much of the country to continue declining here over the next week."
But De Haan cautions that the outlook remains highly uncertain.
He says the gas market is being affected by several international conflicts, including the war between Russia and Ukraine and tensions between the U.S. and Iran.
Ukraine has attacked Russian oil refineries, taking some refining capacity offline. De Haan says that's important because crude oil has to be refined before it can become products like gasoline, diesel and jet fuel.
"With a diminished amount of global refining capacity, there is upward pressure in gas prices," De Haan said.
He says there isn't enough excess refining capacity to simply replace a major refinery overnight if another one goes offline.
That means another major disruption could quickly erase the recent decline in oil prices.
For now, De Haan says drivers can remain cautiously optimistic. If a deal involving Iran and the Strait of Hormuz comes together, prices could continue to ease in the coming days.
But if negotiations fail, he says oil prices, and eventually gas prices, could climb again.
For New Orleans drivers, at least for now, the trend is moving in the right direction.
