Donald Trump has directed the Department of Justice to investigate major oil companies for allegedly failing to pass savings along to consumers at the gas pump, citing a disconnect between falling crude costs and retail prices.
The directive came late Tuesday night in a social media post where Trump accused the industry of price gouging. "The big oil companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for oil," he wrote, adding that "gasoline prices better start going down a lot faster than what I'm seeing."
Oil markets have softened considerably in recent weeks following a tentative resolution to Middle East tensions. The US and Iran agreed to a 60-day ceasefire last week, an arrangement that has reopened the Strait of Hormuz, a critical shipping chokepoint through which roughly one-fifth of global oil and gas exports transit. Despite the reopening, traffic volumes remain depressed compared to pre-conflict levels.
Brent crude, the global price benchmark, has fallen below $75 per barrel for the first time since the conflict began. At US pumps, average prices have retreated from a May peak of $4.56 per gallon to roughly $3.92, offering some relief to drivers who endured spike-driven pain earlier this year. Even so, prices remain elevated compared to a year ago, when the national average was $3.22.
High gasoline costs have become a political liability for Trump, particularly among voters who backed him hoping he would tackle inflation. The nation experienced generational price pressures in 2022 under the Biden administration, with overall inflation peaking at 9.1 percent.
At a rally in Pennsylvania on Tuesday, Trump sought to reassure supporters about near-term relief. "That oil is going to come charging down, and with oil comes everything else," he said.
Energy analysts remain cautious about the pace of further declines. Production shutdowns and refinery outages triggered during the Iran conflict have reduced overall capacity, making experts skeptical that prices will return to pre-war levels anytime soon.
Inflation pressures persist elsewhere in the economy. The May inflation reading hit a three-year high of 4.2 percent, driven largely by energy costs. Core inflation, which strips out volatile food and energy, stood at 2.9 percent. Federal Reserve officials have signaled they may raise rates once more this year despite Trump's public calls for rate cuts.
Author James Rodriguez: "Trump's pinning inflation on oil companies is convenient politics, but the real dynamics are supply constraints and global markets that no DOJ probe will quickly untangle."
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