Trump Orders DOJ Probe Into Oil Pricing After Accusing Majors of Gouging
In brief
- Trump directed DOJ to investigate oil company pricing practices after accusing majors of price gouging on June 24
- Crude oil fell 36% from May 2026 peak while gasoline prices dropped only 14% from mid-May highs
- National average gasoline price stood at $3.93 per gallon, roughly 32-42% above pre-conflict levels
- Exxon Mobil and Chevron are subjects of interest in the DOJ probe
The price gap widens
Crude oil prices have plummeted 36% from their May 2026 peak, with US benchmark WTI crude trading around $70.45 per barrel in late June. In the month prior to late June alone, crude fell 27%. Yet gasoline prices fell only 14% from mid-May highs, creating a widening gap between wholesale and retail energy costs.
The national average gasoline price was $3.93 per gallon on June 25. That price remains roughly 32% to 42% above pre-conflict levels, even after the recent decline. Pre-conflict gasoline prices ranged between $2.76 and $2.98 per gallon.
Trump's claim is direct: oil companies pocketed the savings rather than passing them to drivers. Exxon Mobil and Chevron have been referenced as subjects of interest in the DOJ probe. Both are among the largest integrated oil companies in the world and control significant portions of US refining capacity.
The 'rockets and feathers' defense
Energy economists have long documented what's called the "rockets and feathers" phenomenon. Gasoline prices tend to shoot up quickly when crude rises (rockets) but float down slowly when crude falls (feathers). Oil companies and industry groups have historically attributed this to refining margins, distribution costs, and supply chain lag time.
Whether that explanation satisfies Trump's administration remains unclear. The DOJ investigation will likely examine whether the gap reflects normal market friction or deliberate margin expansion at the pump.
Context: Iran tensions and relief
Escalated US-Iran tensions earlier in 2026 drove crude prices higher and gasoline prices up with them. When those tensions resolved following a peace agreement reached in mid-June, crude snapped back. The sharp crude decline exposed the lag in retail pricing — and gave Trump a political opening to demand action.
