Oil Prices Dropping Faster Than Gas Prices; Trump Orders Investigation
Gas prices are still elevated compared to oil prices, and President Trump is not happy about it and has ordered the DOJ to investigate.
Quick overview
- Brent crude oil prices have dropped 35% in the last five weeks, while U.S. gas prices have only decreased by 20%.
- President Trump has ordered an investigation into oil companies for allegedly overcharging consumers for gasoline.
- The recent decline in oil prices follows a peace agreement between Iran and the U.S., which has led to a temporary ceasefire.
- Consumers are frustrated with the slower decline in gas prices, prompting calls for immediate action to lower costs at the pump.
Brent crude oil benchmark fell 35% in the last five weeks, but the price of gas at the pumps in the United States has only fallen 20% in that time, and President Trump is ordering an investigation.
President Donald Trump blamed the oil companies for overcharging U.S. citizens for gasoline, and he has ordered the Justic Department to look into the situation. As oil prices have fallen sharply across the globe over the last few weeks, the prices at the pumps have not fallen nearly as fast.
On Thursday, Brent crude oil climbed 1.83% to $75 per barrel, after falling sharply for days. West Texas Intermediate is also up, adding 2.32% to reach $72 per barrel. These price movements reflect a minor recovery following a lengthy downtrend caused by a peace deal in the Middle East between Iran and the U.S.
“Customers Are Being Gouged,” Says Trump
On Wednesday on the Truth Social platform, President Trump said that oil companies are not dropping prices in line with how global oil prices are falling. Crude oil prices have been dropping for weeks- first on news that Iran and the United States could be coming to an agreement soon and then on word of an actual agreement. Now that the two countries are under a 60-day ceasefire that stops sanctions, oil prices have fallen dramatically.
The price of gas at the pump is falling as well, but not at the same rate, which has led Trump to call out major oil companies for their alleged greediness and price gouging. He warned that prices need to be lowered quickly and has instructed the DOJ to look into the matter right away.
The price of gas rose sharply during the Iran conflict, as oil became scarcer and a global crisis ensued. The strategic waterway that Starte of Hormuz was at times blocked and at other times became a dangerous place where ships carrying oil were attacked. Oil fields in the Middle East were also attacked during that period between February and June of this year.
The resulting impact on the global oil and gas supply was catastrophic. Prices shot up as shipments were destroyed, stopped, or delayed. When countries could not count on supplies of oil to reach in a timely manner, oil producers were free to drastically raise prices to well over $100 per barrel. The price of gas has been hotly contended and complained about during the entire crisis, and now that prices are falling and rates are returning to normal, consumers expect the price of gas at the pump to drop as well.
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