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By Giulia Carbonaro
Senior Reporter
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President Donald Trump has bashed big oil companies for stubbornly high gas prices in the U.S. in the wake of his deal with Iran, saying that by now gas should cost about $2.25 a gallon nationwide—a level unseen since January 2, 2021.
"The oil prices have been coming down so much, and we are not seeing anything at the pump by comparison to what it should be. We should be, in my opinion, at $2.25 right now at the pump. And we're higher than that," the president told reporters in the Oval Office on Wednesday.
As of Thursday, the U.S. national average gas price was $3.92 per gallon, down from $4.51 a month earlier but still up compared to the average of $2.98 recorded before the start of the war in Iran on February 28, according to data from the American Automobile Association (AAA).
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According to the president, gas prices should have come down much more steeply after the U.S. and Iran agreed to reopen the Strait of Hormuz, a narrow waterway between the Persian Gulf and the Gulf of Oman through which a fifth of the world's oil normally transits.
Since the U.S. and Israel launched a joint bombing on the country, Iran has imposed an effective chokehold on the strait—which the U.S. responded to with a blockade—dramatically cutting traffic through the waterway and disrupting global oil supplies. As a result, crude oil prices skyrocketed to over $100 a barrel, leading to increases in global gas prices as well.
DOJ Confirms Probe Into 'Price Gouging'
Trump has accused oil companies in the U.S. of "price gouging," the practice of taking advantage of a sudden supply shock to raise prices on a good or service significantly. In a social media post published shortly after midnight on Wednesday, the president announced he had directed the Department of Justice to investigate the issue.
A DOJ spokesperson told Newsweek on Wednesday regarding the investigation: "The price of fuel is not only a national security issue, it impacts the wallet of every American. We will always commit to ensuring affordability in this nation."
While initially not offering details on the investigation, during an interview in the Oval Office on Wednesday, Trump alleged that ExxonMobil, Chevron, Shell and BP were culprits of price gouging.
Newsweek contacted ExxonMobil and Chevron for comment by phone and email on Wednesday. Shell and BP were contacted on Thursday morning outside standard working hours.
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"We are doing a big investigation on it, you know. They're not reducing the prices commensurate with what's happening. Look, we are sending out—think of it, 19 million barrels came out yesterday," Trump said on Wednesday, adding, "Don't gouge our people."
Denton Cinquegrana, the chief oil analyst at Oil Price Information Service, a Dow Jones company, told Newsweek that such investigations "typically yield very little evidence of price gouging." The move seems more like "a play to get prices down by midterms," he said.
"And prices will be down by midterms," Cinquegrana continued. "However, I don't think they will drop below prewar levels."
What Has Driven Up Gas Prices Since 2021?
According to AAA data, the U.S. national average gas price has not been as low as $2.25, the price the president suggested on Wednesday, since early January 2021—the last days of Trump's first mandate.
While the president has repeatedly pushed the blame for higher gas prices on his successor, they had begun to rise well before Trump left office. Forbes estimates show that when President Joe Biden was inaugurated in January 2021, gas prices had already risen by 50 percent since the summer of 2020. The increase followed market dynamics tied to tight oil supplies as economies recovered from the shock of the COVID-19 pandemic, with demand shooting up as suppliers struggled to ramp up production.
By early 2022, everything changed when Russia invaded Ukraine, sending shock waves through the global oil market. Biden banned Russian oil, as did the leaders of many Western countries, further tightening oil supplies.
While gas prices in the U.S. were falling in the months leading up to the war in Iran, the shock to global supplies caused by the closure of the Strait of Hormuz has sent them back up to levels unseen since the peaks reached in 2022.
Chances of Gas Prices Falling to 2021 Levels
Despite Trump's impatience and frustration, experts believe that gas prices in the U.S. are falling as quickly as they would expect them to under the current circumstances. In fact, Patrick De Haan, the head of petroleum analysis of GasBuddy, said on social media that they were "falling faster now than they did after peaking in 2022."
The national average price of gasoline is falling 5 percent faster than it did in 2022, he wrote on X on Wednesday. "Current decline: 1.94cpg/day, 2022's rate when prices fell $5.02 to $3.99 was 1.84cpg/day," he said.
But it is unlikely that prices will fall as low as Trump wishes. Partially, that is because summer is normally a more expensive time of the year to fill the tank—with high demand from drivers hitting the road for vacation and the more costly blend produced in the season.
"For now, summer grade gasoline is still being produced, distributed and consumed. It is more expensive to make than winter grade gasoline. If this were in the fall, I think prices would be lower and faster," Cinquegrana said.
On top of that, markets are not so quick at adjusting to new circumstances, and retailers might have to deal with having paid high sums for a good whose price is now falling.
"There's also replacement costs to consider for retailers—which a vast majority of are not operated by major oil companies," Cinquegrana said.
"For example, if I paid $3.50 per gallon for my latest delivery, I cannot sell those gallons below my cost. That's a pretty bad business model," he added. "As a retailer I will have to wait until the more expensive gas is cleared. Then, the next load will be, say, $3.25 per gallon, and prices can drop after that."
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For Cinquegrana, there is now a clear downtrend in retail gasoline prices that should continue over the next few weeks. He believed that by the July 4 weekend, prices would be in the $3.75 per gallon area nationally—far from Trump's dream of $2.25.
De Haan told Newsweek that he expected the national average to fall to $3.70 per gallon by July 4, and that by the end of summer—"barring hurricanes or re-escalations"—it could be closer to $3.35.
What about that $2.25 national average gas price? With negotiations between the U.S. and Iran still ongoing, it is hard to make predictions. But in a previous interview with Newsweek, Cinquegrana warned Americans that they could "kiss" the prewar national average of $2.98 per gallon "goodbye for the rest of 2026."
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