Oil Prices Plummeting. Can inflation drop as fast?

Oil prices dropped sharply this week, falling by over 10% on April 17, after Iran said the Strait of Hormuz would reopen to commercial ships during the ceasefire.

Crude oil went from as high as $116 on April 7, only 10 days ago, to $94 yesterday and briefly below $81 on April 17. Brent went from $111 as of April 7 to as low as ~$86 on April 17.

Gasoline was already following, albeit more slowly

Dropping oil prices are already having a positive effect on gasoline prices at the pump. Truflation's US Gasoline Price Index registered its first drop as of April 9, only 2 days after oil reversed its trend.

This index, available as a national, regional and by state metric, is worth watching to see how quickly the changing oil prices translate to prices at the pump, and then into the Gasoline inflation component of Truflation's US CPI, which also paused and reversed trend this week.

Real-time inflation is already reacting

US inflation today was 1.77% year-over-year (as of April 17, 2026). The drop from 1.88% only 3 days ago was mainly driven by food prices. Food & Beverages total and Food at Home were both back in deflation this week.

Another reason we can see some disinflationary trends reemerging in our headline inflation is that gasoline inflation has stopped rising.

Although not as fast as our Truflation Gasoline Price Index, the Gasoline and fuels component of the Truflation CPI also reacted quickly to plummeting oil commodity prices.

Hopefully, that effect will soon bring tangible effects to the inflation experienced on the ground.

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