Donald Trump has adopted a critical stance against major oil companies, including Exxon Mobil and Chevron, accusing them of making excessive profits during the ongoing conflict in Iran. This approach marks a shift, as Trump, known as a proponent of free enterprise, is now echoing criticisms previously leveled by Democrats, such as President Biden in 2022 and California Governor Gavin Newsom, regarding high fuel prices. Trump specifically highlighted that Exxon Mobil and Chevron collectively reported $26.5 billion in second-quarter net income, with Chevron's earnings jumping to $12 billion from $2.5 billion a year prior, and Exxon Mobil's more than doubling to $14.5 billion from $7.1 billion.
Trump's frustration stems from the national average gasoline price, which stands at around $4.08 to $4.10 per gallon, nearly 40% higher than the $2.98 per gallon recorded before the Iran conflict began on February 28. He criticized companies for not lowering retail prices despite a significant drop in crude oil prices, with the U.S. benchmark falling to about $70 a barrel. This discrepancy has led him to instruct the Justice Department to investigate potential consumer gouging.
Industry experts and executives, however, have pushed back, stating that pump prices do not immediately reflect changes in crude oil costs due to the slow-moving nature of the fuel supply chain and global market factors beyond any single U.S. company's control. Patrick De Haan, head of petroleum analysis at GasBuddy, noted that crude oil is the biggest input and is priced on a global market, influenced by events like OPEC decisions and disruptions in critical shipping lanes like the Strait of Hormuz. Retailers, he added, operate on thin margins, often making more profit from items like coffee than from gasoline sales.
Despite Trump's critique, some oil executives maintain that accusations of price gouging are not based on facts and that it takes time for lower crude prices to translate to savings at the pump. The American Petroleum Institute also emphasized that gasoline prices do not move in lockstep with crude oil, especially during global disruptions affecting supply, refining, and inventories. Trump's actions are seen by some analysts as a populist move, similar to those taken by presidents from both parties when faced with high fuel costs.
