ROCKETS & FEATHERS

What the Oil Market Owes You — And Why You Rarely Collect

A Policy & Civic Education Paper

Published March 2026  | 

Executive Summary

When the world price of oil rises, American drivers pay more at the pump within days. When the world price of oil falls by the same amount, drivers wait weeks — sometimes months — to see relief. The gap between those two speeds is not accidental. It is not explained by supply chains. It has been measured, documented, and confirmed in peer-reviewed academic literature since 1991.

It has a name: the Rockets and Feathers Hypothesis.

This paper documents the phenomenon using five decades of oil shock data, applies the confirmed academic findings to the current 2026 Iran War, and gives American consumers a practical tool: a projection of when, based on historical patterns, pump price relief can realistically be expected once the conflict ends.

The answer is not reassuring. History says the war ending tomorrow will not lower your gas prices for four to eight weeks — and the full relief may take longer. This paper explains why, what the data shows, and what it means for how we think about energy markets, market power, and the accountability of the supply chain to the American consumer.

Section I: The Phenomenon — Rockets and Feathers

What It Is

The Rockets and Feathers Hypothesis describes a structural asymmetry in how the retail price of gasoline responds to changes in the world price of crude oil. When crude oil prices rise, gasoline prices at the pump respond quickly — like a rocket. When crude oil prices fall, gasoline prices descend slowly — like a feather.

This is not a perception. It is not consumer psychology. It is a measurable, documented, statistically confirmed feature of the retail gasoline market.

The phenomenon was first formally named by economist Robert Bacon in 1991, studying the UK retail gasoline market. Since then, it has been confirmed independently in the United States, Canada, South Korea, Germany, France, Italy, the Netherlands, Belgium, Spain, Greece, and China. It is not a quirk of any single market. It is a structural feature of how energy supply chains pass costs to consumers.

The Measured Numbers

The most cited American study — Borenstein, Cameron and Gilbert, published in the Quarterly Journal of Economics — measured the pass-through lag with precision:

Direction of Crude Price Change	Pass-Through Day 1	Pass-Through Week 2	Pass-Through Week 4	Fully Reflected at Pump
Price INCREASE (Rocket)	~12% same day	~35–40%	~50%+	~4 weeks
Price DECREASE (Feather)	Minimal	Slow / partial	Still partial	~8 weeks
Asymmetry Ratio	—	—	—	2:1

The Dallas Federal Reserve refined this further using daily data: approximately 12 percent of a crude oil price increase passes through to retail pump prices on the same day the crude price rises, gradually increasing to roughly 50 percent after 20 working days. The downward pass-through — when crude prices fall — takes approximately twice as long to reach the same level of reflection at the pump.

A separate study of California's retail gasoline market found that a 10 percent reduction in crude oil prices resulted in only a 5 percent decline in retail pump prices — consumers receiving less than half the benefit of a crude oil price decrease while absorbing close to the full cost of a price increase.

Why It Happens

Academic researchers have identified three primary mechanisms behind the asymmetry:

Seller market power. Retail gasoline markets are not perfectly competitive. Gas stations that are physically isolated from competitors have measurably more asymmetry than stations with competitors in immediate proximity. Where competition is weak, the incentive to pass savings quickly to consumers is also weak.

Inventory management. Refiners and distributors hold gasoline in storage. When crude prices rise, they can justify higher retail prices immediately by pointing to replacement cost — what it will cost to replenish the inventory. When crude prices fall, they continue selling the more expensive inventory already in the pipeline, deferring price reductions. The pipeline argument, as it turns out, only runs one direction.

Consumer search costs. Drivers do not typically monitor gasoline prices until they need fuel. When prices spike, the increase is visible and immediate. When prices fall, consumers may not notice — or may not act on the knowledge — as quickly. This allows stations to hold prices elevated longer after a crude price decline without losing significant business.

The Federal Trade Commission studied this phenomenon and confirmed that the most significant asymmetry occurs at the retail level — meaning the gas station, not the refiner, is where most of the consumer cost is concentrated.

Section II: Five Decades of Evidence

The following table applies the Rockets and Feathers framework to the five most significant oil supply disruptions since 1973. All prices are nominal — not inflation-adjusted — because what we are measuring is the speed of price change relative to crude oil movement, not the absolute dollar amount.

Shock / Trigger	Pre-Shock Pump Price	Peak Pump Price	% Rise	Rise Time	Return to Baseline	Return Time	Asymmetry
1973 Arab Embargo Yom Kippur War, Oct 1973	$0.385/gal (May 1973)	$0.551/gal (Jun 1974)	+43%	~8 months	Distorted by Nixon price controls — market suppressed	N/A	Controls masked asymmetry
1979 Iranian Revolution Iran-Iraq War, 1979–80	~$0.86/gal (early 1979)	~$1.25/gal (1980)	+45%	~12 months	Gradual decline through 1980s	5–6 years	~5:1 to 6:1
1990 Gulf War Iraq invades Kuwait, Aug 1990	~$1.07/gal (Jul 1990)	~$1.38/gal (Oct 1990)	+29%	~3 months	~$1.10/gal (Feb 1991) after coalition victory	~5 months	~1.7:1
2008 Demand Surge Global growth spike	~$3.07/gal (Jan 2008)	$4.11/gal (Jul 2008)	+34%	~7 months	~$1.67/gal (Dec 2008) Recession forced decline	~5 months down	Recession anomaly — demand collapse
2022 Russia-Ukraine War Invasion Feb 24, 2022	~$3.53/gal (Feb 7, 2022)	$5.01/gal (Jun 2022)	+42%	~15 weeks	~$3.17/gal (Dec 2022)	~26 weeks	~1.7:1
2026 Iran War US-Israel strikes Feb 28, 2026	$2.902/gal (Feb 13, 2026 — 15-day baseline)	$3.578/gal (Mar 12, 2026 — still rising)	+23% in 12 days	Still active	TBD	TBD	Currently tracking

The 2008 shock is the one clear outlier in the dataset. Prices fell faster than they rose because the 2008 financial crisis triggered a catastrophic collapse in global economic demand — not a market correction but a demand destruction event. This is the exception that proves the rule: only an economic recession powerful enough to eliminate demand can overcome the structural asymmetry in how the supply chain passes price relief to consumers.

Remove 2008 and every other measured shock in five decades confirms the Rockets and Feathers pattern. Prices rise faster than they fall. Every time.

Section III: The 2026 Iran War — A Real-Time Case Study

What Happened

On February 28, 2026, the United States and Israel initiated joint military strikes against Iran in an operation designated Operation Epic Fury. The opening salvo killed Supreme Leader Ali Khamenei. Iran responded with waves of missiles and drones targeting Israel, US military bases, and Gulf state infrastructure. The Strait of Hormuz — through which approximately 20 percent of the world's daily oil supply transits — was effectively closed to commercial tanker traffic.

The oil market reacted immediately and with historic force.

The Price Timeline

Date	Event	Brent Crude	US Avg Pump Price	Source
Feb 13, 2026	15-day pre-shock baseline	~$62/bbl	$2.902/gal	EIA Weekly
Feb 23, 2026	5 days before conflict	~$63/bbl	$2.937/gal	EIA / Rigzone
Feb 28, 2026	DAY ZERO — Strikes begin	~$66/bbl	~$2.95/gal*	Interpolated
Mar 2, 2026	Day +2	~$72/bbl	$3.015/gal	EIA Weekly
Mar 6, 2026	Weekly close — record weekly gain	~$93/bbl	$3.50/gal	EIA / CNBC
Mar 9, 2026	Intraday high — Israel bombs Iranian oil depots	$119.50/bbl peak	$3.502/gal	EIA / Barchart
Mar 9, 2026	Trump signals war near end — partial retreat	~$87–94/bbl	$3.502/gal	Barchart / Reuters
Mar 12, 2026	TODAY — Day +12 of conflict	$95.83/bbl	$3.578/gal	Oilprice.com / AAA

*Day Zero pump price is interpolated between the confirmed EIA readings of February 23 ($2.937) and March 2 ($3.015). No single confirmed daily reading exists for February 28 itself.

The 35.63% weekly gain in WTI crude during the week of March 2–6 was the largest single-week gain in the history of oil futures trading, dating back to 1983. Brent's 28% weekly gain was its largest since April 2020.

The pump price rose $0.676 from the 15-day baseline to today's reading — a 23% increase in 12 days. The crude oil increase from baseline to today's price represents a 54% increase. The pump has not yet caught up. It will.

Market Volatility: What It Tells Us

The intraday spike to $119.50 per barrel on March 9, followed by a sharp retreat to the $87–94 range after President Trump signaled the war might end soon, illustrates something important about how energy markets work in conflict conditions.

Markets are not pricing the oil that is in the ground today. They are pricing the fear of what tomorrow might bring. When Trump's statement reduced that fear even temporarily, crude fell more than 15% in a single session. When combat operations continued and the reality of an ongoing conflict reasserted itself, prices corrected back upward.

This volatility is real but it is not what American consumers should be watching. The price that matters is not the futures spike or the fear-driven intraday high. The price that matters is where crude settles when the conflict ends — and how long it then takes for that settled price to reach the pump.

History says: longer than you think. Longer than it should. And slower than the speed at which prices went up.

Section IV: The Projection — When Will Relief Come?

The Framework

The following projection is built on three inputs: the confirmed academic findings on pass-through lag (Borenstein, Cameron & Gilbert; Dallas Federal Reserve), the historical asymmetry ratios documented in Section II, and the current market data from the 2026 Iran conflict.

We do not predict when the conflict ends. We project what happens at the pump after it ends, using the two-to-one asymmetry ratio as the baseline and the 1990 Gulf War as the closest historical analog — a conflict involving Middle East supply disruption, resolved by US military action, with no price controls distorting the market.

Scenario Assumptions

For this projection we assume: the conflict ends with Iran unable to continue offensive operations, the Strait of Hormuz reopens to commercial tanker traffic within one to two weeks of conflict resolution, Gulf state production returns to pre-conflict levels within four to six weeks, and Brent crude settles in the $65–75 range — above the pre-conflict baseline of ~$62 but substantially below current levels, reflecting the removal of the geopolitical risk premium while acknowledging some permanent supply disruption from damaged infrastructure.

The Projection Table

Scenario	Conflict Ends	Hormuz Reopens	Brent Settles To	50% Pump Relief By	Full Pump Relief By	Expected Pump Price
Best Case (swift resolution)	Late March 2026	Early April 2026	~$68–72/bbl	Mid-May 2026 (~6 weeks post-resolution)	Late May / June 2026 (~8–10 weeks post-resolution)	~$3.00–3.10/gal
Base Case (1990 Gulf War analog)	Mid-April 2026	Late April 2026	~$70–75/bbl	Late May 2026 (~6 weeks post-resolution)	Late June / July 2026 (~10–12 weeks post-resolution)	~$3.05–3.20/gal
Extended Case (conflict drags 2–3 more months)	May–June 2026	June 2026	~$75–85/bbl	August 2026 (~8 weeks post-resolution)	September 2026 (~12 weeks post-resolution)	~$3.15–3.40/gal
Worst Case (infrastructure damage severe)	June+ 2026	July+ 2026	~$85–95/bbl	September 2026	October–November 2026	~$3.40–3.70/gal

These projections are based on historical patterns, not predictions. The actual trajectory will depend on the speed of Hormuz reopening, the extent of infrastructure damage to Gulf state production and refining capacity, OPEC production decisions, and whether the IEA's 400-million-barrel strategic reserve release effectively cushions the market during the transition period.

What the projections tell us is not the precise date of relief. They tell us the structure of the delay. In every scenario, the war ending does not immediately lower your gas prices. In every scenario, the relief arrives weeks to months after the crude oil price begins falling — exactly as the Rockets and Feathers pattern predicts.

The Rule of Thumb

Based on the historical data and the confirmed academic findings, here is the practical consumer guide:

If Brent crude falls by...	Expect pump prices to begin moving in...	Expect full reflection at pump in...
10%	1–2 weeks (partial movement only)	4–6 weeks
20%	1–2 weeks (partial movement only)	6–8 weeks
30% or more	2–3 weeks (partial movement only)	8–12 weeks
Current scenario (~40% drop expected)	2–4 weeks after Hormuz reopens	10–14 weeks after crude settles

The rocket goes up fast. The feather comes down slow. The gap between those two speeds is the cost the American consumer pays every time a supply disruption occurs — not once in the price spike, but again in the delayed relief.

Section V: What This Means for Governance

The Rockets and Feathers phenomenon is not illegal. It is structural. It emerges from the combination of market concentration, inventory management practices, and consumer search behavior that characterize the retail gasoline market. No individual gas station owner is breaking any law by holding prices elevated while waiting to see where crude settles.

But that does not mean it is acceptable as a matter of public policy. And it does not mean that the American consumer — who has no choice but to buy gasoline — has no legitimate claim on how the supply chain manages that asymmetry.

Here is what this campaign believes:

1. First, transparency is not optional. The oil-to-pump price relationship should be published and tracked publicly in real time, the same way we publish the Consumer Price Index. If the asymmetry is structural and not illegal, the least the public is owed is an honest account of its existence and its size. Currently, most Americans know instinctively that prices go up faster than they come down. Almost none of them know the phenomenon has been formally named, confirmed in dozens of peer-reviewed studies, and measured at a 2:1 ratio.

2. Second, the pipeline argument has a time limit. When crude prices fall, the industry's standard defense is that they are still selling the expensive oil already in the pipeline. This is true — for a finite period. The academic research establishes that period at approximately four weeks for the cost increase to be substantially reflected, and approximately eight weeks for a cost decrease. Any gap beyond eight weeks between a crude price decline and a pump price decline is not pipeline economics. It is margin expansion at the consumer's expense.

3. Third, emergency price relief mechanisms should be symmetric. When the President releases oil from the Strategic Petroleum Reserve to cushion a supply shock, that action benefits the supply chain immediately — the crude enters the market and suppresses the wholesale price. The consumer benefit is indirect and delayed, because the Rockets and Feathers mechanism means the wholesale price reduction reaches the pump on the feather timeline. A complete policy response to supply disruptions should include transparency requirements and accountability mechanisms that accelerate the downward pass-through when emergency strategic reserves are deployed.

The goal is not price controls. The goal is informed citizens and accountable markets. If the supply chain benefits from the rocket, it owes the consumer the feather — on an equivalent timeline.

Conclusion

The Iran War of 2026 is, among many things, a real-time demonstration of a fifty-year-old economic phenomenon. Prices at your pump rose 23 percent in twelve days. The war ending — whenever that happens — will not give those 23 percent back in twelve days. History says it will take four to twelve weeks, depending on how quickly the Strait of Hormuz reopens and where crude oil settles.

That gap is not a force of nature. It is a structural feature of a market that has more incentive to pass costs quickly than it has to pass savings quickly. It has been studied, named, and confirmed. It is called Rockets and Feathers.

Now you know what to call it too.

When you watch the price of oil drop on the news and then drive to the station and find the pump price unchanged, you will know that you are not imagining things. You are watching the feather descend. And you will know, from this paper, approximately how long the descent takes — and what the gap between the rocket and the feather has cost you.

Demand better. Ask your member of Congress why the Strategic Petroleum Reserve can cushion the rocket but nothing cushions the feather. Ask your state attorney general's office what monitoring mechanisms exist for asymmetric price behavior. Ask your local gas station what their pricing policy is when wholesale costs decline.

Ask the questions. Demand the answers. That is what an engaged citizenry does. And that is precisely what this campaign is for.

Bibliography and Sources

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2. Bacon, Robert W. "Rockets and Feathers: The Asymmetric Speed of Adjustment of UK Retail Gasoline Prices to Cost Changes." Energy Economics, Vol. 13, No. 3 (July 1991), pp. 211–218. Elsevier. https://doi.org/10.1016/0140-9883(91)90022-R

3. Lewis, Matthew S. "Asymmetric Price Adjustment and Consumer Search: An Examination of the Retail Gasoline Market." Journal of Economics and Management Strategy, Vol. 20, No. 2 (Summer 2011), pp. 409–449. Wiley. https://doi.org/10.1111/j.1530-9134.2011.00291.x

4. Verlinda, Jeremy A. "Do Rockets Rise Faster and Feathers Fall Slower in an Atmosphere of Local Market Power? Evidence from the Retail Gasoline Market." The Journal of Industrial Economics, Vol. 56, No. 3 (September 2008), pp. 581–612. Wiley. https://doi.org/10.1111/j.1467-6451.2008.00355.x

5. Chesnes, Matthew. "Asymmetric Pass-Through in U.S. Gasoline Prices." Federal Trade Commission Working Paper No. 302. Washington, D.C.: Federal Trade Commission, Bureau of Economics, 2010. https://www.ftc.gov/sites/default/files/documents/reports/asymmetric-pass-through-u.s.gasoline-prices/wp302_0.pdf

6. Owyang, Michael T. "Rockets and Feathers: Why Don't Gasoline Prices Always Move in Sync with Oil Prices?" Regional Economist, Federal Reserve Bank of St. Louis (October 2014). https://www.stlouisfed.org/publications/regional-economist/october-2014/rockets-and-feathers-why-dont-gasoline-prices-always-move-in-sync-with-oil-prices

7. Dallas Federal Reserve Bank. "Crude Oil Price Changes Quicker to Register at Gasoline Pump." Dallas Fed Economics (October 2019). https://www.dallasfed.org/research/economics/2019/1001

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10. Rigzone / Standard Chartered. "Average USA Gasoline Price Nears $3.6 Per Gallon." Rigzone, March 12, 2026. https://www.rigzone.com/news/average_usa_gasoline_price_nears_36_per_gallon-12-mar-2026-183193-article/

11. CNBC. "Oil Surges 35% This Week for Biggest Gain in Futures Trading History Dating Back to 1983." CNBC, March 6, 2026. https://www.cnbc.com/2026/03/06/iran-us-war-oil-prices-brent-wti-barrel-futures.html

12. International Energy Agency. "Oil Market Report — March 2026." IEA, Paris, March 2026. https://www.iea.org/reports/oil-market-report-march-2026

13. U.S. Energy Information Administration. "Short-Term Energy Outlook, March 2026." EIA, Washington, D.C. https://www.eia.gov/outlooks/steo/

14. AAA Fuel Prices. National Average Gasoline Price, March 12, 2026. https://gasprices.aaa.com/

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16. House of Commons Library. "US-Israel Strikes on Iran: February/March 2026." UK Parliament Research Briefing CBP-10521, March 2026. https://commonslibrary.parliament.uk/research-briefings/cbp-10521/

    
    

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Document version 1.0  |  March 2026  |  To be updated as 2026 Iran War data becomes available.