- Trump has called on the Department of Justice to immediately launch an antitrust investigation into major oil companies, primarily because international crude oil prices have fallen by 18% from their early March peak, yet U.S. retail gasoline prices have not reflected this drop.
- The average price of regular gasoline in the U.S. fell to $3.85 per gallon this Monday, a decrease of 14.1 cents from last week, but the White House believes the extent and speed of retail price reductions have not met expectations.
- Analysts point out that with the midterm elections approaching in November, the White House's move aims to restore voter confidence in the government's ability to control living costs by targeting large energy companies. Meanwhile, supply chain delays in the Red Sea and the Strait of Hormuz are deep-rooted reasons for the slow transmission of price reductions.
DOJ Involvement and White House Pressure on Retail Profit Margins
U.S. President Trump stated on social media that consumers are being unfairly priced at gas stations and has formally ordered the Department of Justice to investigate whether major oil producers and retailers are engaging in price manipulation. The White House believes that in the context of an 18% significant pullback in international oil prices from their highs, the downward slope of retail gasoline prices is noticeably lagging behind the decline in crude oil costs, with energy giants suspected of maintaining high retail margins to the detriment of consumers.
Refining Transmission Cycle and Tax System Pressure on Price Reassessment
Energy economists are skeptical about the actual effectiveness of such interventions. Karen Young, a researcher at Columbia University's Center on Global Energy Policy, points out that retail gasoline prices are not only directly linked to crude oil trends but also include fixed federal and state tax burdens, which objectively dilute the percentage contribution of crude oil declines to end pricing. Additionally, the conversion of crude oil price drops into gas station prices requires a reevaluation of refinery feedstock costs, refinery margin balancing, and the physical transportation cycle from wholesale to retail, with the transmission mechanism typically experiencing a lag of several weeks.
Geopolitical Situation in the Strait of Hormuz and Shipping Capacity Variables
On the global supply chain front, the slow recovery of shipping efficiency has further extended the cycle of energy product price reductions. Aditi Rasquinha, CEO of DHL Global Forwarding Greater China, stated that although the Strait of Hormuz has recently resumed limited navigation, overall shipping volume remains well below previous levels, and shipowners in the Persian Gulf region remain cautious about dispatching vessels. According to monitoring by Windward data, 25 ships passed through the strait on Monday. While optimistic expectations from U.S.-Iran negotiations have provided some market support, actual capacity constraints, such as recent tanker lease cancellations by Indian refineries, continue to materially delay the process of stabilizing global refined oil supply.
