Oil prices have nearly returned to prewar levels following a memorandum of understanding between the United States and Iran intended to ease tensions, but gasoline prices at the pump remain significantly higher than they were before the conflict began, according to data from AAA and market analysts.
The U.S. benchmark West Texas Intermediate crude oil was trading at about $69 per barrel Friday, nearly back to its prewar price of roughly $67, after Iran disrupted global supplies by closing the Strait of Hormuz, a critical shipping lane that carries about one-fifth of global oil consumption. However, national average gasoline prices stood at $3.90 per gallon as of Friday morning, up nearly $1 from late February.
President Trump has blamed major oil companies for what he called price "gouging" and said he instructed the Department of Justice to investigate. The conflict between Washington and Tehran had pushed gas prices above $4.50 per gallon earlier this year.
What the Right Is Saying
Conservatives and free-market advocates have rejected the idea of coordinated gouging, instead pointing to market fundamentals and the competitive nature of gasoline retail.
A spokesperson for the American Petroleum Institute pushed back on Trump's characterization in a written statement. "Gasoline prices don't move in lockstep with crude oil, especially during a major global disruption that is still affecting supply, refining and inventories," API spokesperson Bethany Williams said.
Rob Smith, director of global fuel retail at S&P Global Energy's Refining and Marketing group, cast doubt on coordinated gouging. "The U.S. retail gasoline market is so incredibly fragmented in terms of ownership that it's very difficult for there to be any kind of coordinated effort," he said. He noted that price signs are visible everywhere, creating intense competitive pressure.
Chevron Chief Financial Officer Eimear Bonner told CNBC it will take time for prices to fall. "There is a lag between reductions in oil prices and when that shows up at the pump, but we expect that prices will come down as things continue to normalize," she said.
What the Left Is Saying
Progressive economists and consumer advocates have pointed to the human cost of sustained high gasoline prices on working-class families, noting that low- and middle-income households are disproportionately affected by energy costs.
Mark Wolfe, executive director of the National Energy Assistance Directors Association, said in an email that for many households, additional monthly expenses add up quickly. "For low- and even many middle-income households living paycheck to paycheck, an additional $100 a month in energy costs is significant," he wrote. He noted that lower-income families may take on credit card debt while middle-income households cut discretionary spending on dining out, vacations, and other consumer goods.
Some Democratic lawmakers have echoed concerns about oil company profits during periods of global instability, arguing that regulatory oversight should extend to retail pricing practices.
What the Numbers Show
According to AAA, national average gasoline prices stood at $3.90 per gallon Friday, nearly $1 higher than late February prices before the Iran conflict escalated.
The National Association of Convenience Stores reports that approximately 55 percent of gas stations are single-location operators, making them small businesses rather than corporate chains. The American Petroleum Institute notes fewer than 5 percent are owned by major oil companies.
Oil industry analyst Andy Lipow, president of Lipow Oil Associates, said the anger directed at large oil companies is misplaced because they own a small fraction of retail locations. "The public is mad at the major oil companies because gasoline prices have not fallen as fast as crude oil," he wrote in an email to The Hill. He added that station owners are currently earning higher margins.
Rystad Energy Chief Economist Claudio Galimberti noted that inventories remain low globally while demand is high during peak driving season, factors that typically support elevated retail pricing.
The Bottom Line
The gap between crude oil prices and pump prices reflects the lag inherent in retail fuel markets as well as current inventory levels and seasonal demand patterns. Industry analysts widely acknowledge that gasoline prices tend to rise quickly but fall more gradually.
Small business station operators are currently recouping margins lost during earlier supply disruptions, according to industry experts. The fragmented ownership structure of the U.S. retail market makes coordinated pricing changes difficult, they argue.
Consumers can expect gradual relief at the pump as crude oil prices stabilize and inventories rebuild over coming weeks, though the pace of any decline will depend on continued improvement in global supply conditions and seasonal demand trends.