Trump is frustrated gasoline prices don’t mirror oil’s decline. Experts say it’s not that simple

NEW YORK (AP) — U.S. gasoline prices decreased an average of 49 cents a gallon in the last month as expectations rose for an end to the war with Iran. But they’re not falling fast enough for President Donald Trump.

Trump, who wants to stave off the economic fallout of the war ahead of midterm elections, is now pointing at oil companies as the culprit. The president said on social media early Wednesday that he had tasked the Justice Department with investigating whether “customers are being ’gouged.”

“The big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil,” Trump wrote in a Truth Social post published just after midnight. “Gasoline prices better start going down a lot faster than what I’m seeing!”

Crude oil is the main ingredient in gasoline, and its cost makes up the bulk of what consumers pay at the pump. But oil companies don’t set gasoline prices; gas station owners do. Those operators often have little choice but to raise pump prices when the cost of oil surges like it did during the Iran war.

Even after crude prices come down, it can take weeks or longer for market changes to reach refineries and eventually consumers, experts said.

“It sounds a bit like political theater to me,” Karen Young, a senior research scholar at Columbia University’s Center on Global Energy Policy, said when asked during a CNBC interview about Trump’s price-gouging allegation. “That’s not really how gasoline prices work in the U.S.”

WTI, the U.S. benchmark crude, fell 27% in the last month and was trading at $70.45 a barrel Wednesday, about 5% more than before the war started. Meanwhile, a gallon of regular gasoline cost about $3.93 on average in the U.S., according to motor club federation AAA. That was about 13% lower than a month ago and 32% higher than before the war.

Here’s what we know.

Gas prices are multifaceted

Multiple factors go into what gas station owners decide to charge.

In the U.S., oil prices represented about 51% of the price of a gallon of gasoline last year, per the Energy Information Administration. When crude oil gets more expensive because there’s less on the market, gasoline prices generally follow.

Before reaching an interim agreement with the Trump administration last week, Iran blocked ships from crossing the Strait of Hormuz, a waterway off the country’s coast through which one-fifth of the world’s oil and natural gas typically passes.

In 2025, federal and state taxes contributed about 17% of the gasoline price, refining costs and profits contributed 14% and distribution, and marketing contributed 17%, the EIA said. In some states, such as California, higher taxes and refining costs push prices well above the national average.

While expensive oil was the leading driver of higher gasoline prices in recent months, U.S. gas prices typically tick up a bit at this time of year. Warmer weather brings a shift to summer blend fuels, which is more expensive to refine than the versions sold in colder months. Demand also is greater as more people hit the road.

For the upcoming July Fourth holiday period, AAA forecast 61.4 million Americans traveling at least 50 miles away from home by car, slightly more than the 61.3 million who took road trips last year.

There’s a lag between oil and gas prices

Some components of fuel prices are outside a gas station’s control.

Refineries buy crude oil in advance, and deliveries of that oil take time. Refineries may be processing more expensive supplies weeks or months after market prices fall. After refining, gasoline travels through pipelines, ships, trucks and fuel terminals before landing at filling stations, further prolonging higher prices for consumers.

“We all felt how fast gasoline prices rose this spring,” Rob Smith, director of global fuel retail at data and analytics provider S&P Global Energy. “The pace of their rise was actually less than the pace of the rise for crude oil.”

Smith calculated that the price for Brent crude oil, the international standard, rose about $1.75 per gallon between the start of the war and early April, and during that same time, the average price of gasoline went up $1.10.

“It went up a lot,” Smith said of gasoline. “But it still wasn’t as much as the crude price went up.”

That’s because retailers resisted passing along all of the fuel price increase to customers, absorbing some of the cost, he said. When oil prices started falling, those retailers could recoup some of the money they lost, Smith added.

“Over the course of a year, there’s a certain operating margin that the retailers need to keep the lights on,” he said. “The vast majority of gas stations are owned by small corporations. A family that owns a dozen stations, or even one or two stations, they have little room for error.”

Oil prices have tumbled for several weeks now, stemming from both anticipation that led up to the tentative deal the U.S. and Iran signed last week and optimism now that more ships are passing through the Strait of Hormuz.

“Our industry shares the goal of delivering relief at the pump and restoring stability to global energy markets,” Bethany Williams, spokesperson for the American Petroleum Institute, said via email. “Gasoline prices don’t move in lockstep with crude oil, especially during a major global disruption that is still affecting supply, refining and inventories.”

But beyond how markets are feeling, analysts warn it could take months, if not longer, for supply chains to return to pre-war levels. Earlier this week, S&P Global Energy said it did not expect Persian Gulf oil production to rebound fully until at least the first quarter of 2027.

Conditions in the strait have also proven to escalate or deteriorate quickly.

Prices are still higher than before the war

Even with prices dropping, motorists in the U.S. are paying almost $1 more per gallon than they were before the war, and gas is nearly 22% more expensive than it was at this time last year. That has caused many households to tighten budgets and rethink how they want to spend their money more broadly.

Gas also isn’t the only thing that’s gotten more expensive during the war. Groceries, airline tickets and even goods like condoms and shoes now cost more due to supply chain disruptions. Even if a final peace deal is reached and oil resumes flowing reliably from the Middle East, experts warn prices will likely remain elevated for some time.

Before joining Israel to launch the war with strikes on Iran on Feb. 28, Trump bragged about low gas prices. But after Iran effectively cut off traffic from the Strait of Hormuz and energy prices skyrocketed, the president quickly pivoted. At one point, he tried to paint steep energy prices as a positive for the business of U.S. crude production — stating in March that, because the U.S. is the largest oil producer in the world, “when oil prices go up, we make a lot of money.”

Meanwhile,an online tracker from Brown University’s Watson School of International and Public Affairs estimates higher fuel prices for gas and diesel alone have cost Americans an average of over $474 per household since the war began, reflecting a consumer burden of about $62.1 billion overall.