GasBuddy analyst Patrick De Haan on Sunday called for cautious optimism over an agreement between the U.S. and Iran that would end the blockade over the Strait of Hormuz and bring an end to the war, leading to a smooth flow of oil.

U.S.-Iran Deal Struck

In a series of posts on the social media platform X, De Haan said that while an agreement had been reached between Washington and Tehran, "the next few days will be key to see if the agreement sticks, and if traffic begins moving in the Strait."

He then said that the agreement had led to a 5% decline in the West Texas Intermediate (WTI) crude price, adding that the "national average price of gasoline may continue to fade."

Gas Prices Could Fall Below $3.75/Gallon

In the same thread, De Haan said that the national average gas price could fall below $3.75/gallon by the Fourth of July. However, the estimates were made for an "optimistic timeline," and the "hurricane season could be a major wildcard for the rest of summer."

He also said that depleting global oil reserves due to the Iran war means that it could "take months or beyond to fully restore global oil inventories."

Gas prices in the U.S. fell on Sunday, with the national average price at $4.0740/gallon, according to data from the American Automobile Association (AAA). The average price in California was at $5.7470/gallon.

De Haan had earlier criticized high gas prices in the U.S., saying that the "people paying higher prices" for gasoline in the U.S. remained the biggest losers of the war with Iran.

'Foolish' To Think Challenges Are Over

De Haan also shared that the next few weeks would be key, with "one major slip up" heavily impacting oil prices. De Haan also warned of several "speed bumps" in the situation. "It may be foolish to think this problem is now completely over. Time will tell," the analyst said.

Iran Deal Agreed

President Donald Trump said that a deal with Iran had been agreed and that the Strait of Hormuz was open to traffic. "Ships of the World, start your engines. Let the oil flow!" Trump wrote in a post on the social media platform Truth Social following the agreement.

Pakistani Prime Minister Shehbaz Sharif also said that a deal between Washington and Tehran had been agreed upon following "intensive talks."