As Hormuz crisis eases, gas prices may drop—other costs like groceries and home goods could stay high for a while

Americans could see some relief at the gas pump after oil prices tumbled Monday on news of a tentative agreement to reopen the Strait of Hormuz. U.S. crude oil futures have fallen to under $80 a barrel , their lowest level since March. The impact of oil prices extends beyond gasoline . As a rough rule of thumb, every 10% sustained increase in oil prices adds as much as a third of a percentage point to annual inflation over the following year, according to Christopher Hodge, an economist at Natixis CIB Americas. But lower oil prices don't mean other costs will fall right away. While gasoline prices tend to respond relatively quickly to changes in crude oil, lower energy costs can take much longer to show up in groceries, household goods and other everyday expenses. "Consumers can expect relief at the gas pump... but they shouldn't expect broad price reductions across the economy," says Stephen Kates, a financial analyst at Bankrate. For one thing, there's no guarantee crude prices will stay low, even if the Strait reopens. Oil supplies may take time to recover , and countries that tapped strategic reserves during the crisis will need to replenish them, creating additional demand, Kates says. And even if energy costs continue to ease, consumers may not see the benefits right away, says David Ortega, a food economist at Michigan State University. …