President Donald Trump has directed the Department of Justice (DOJ) to investigate major oil companies for failing to reduce gasoline prices in line with declining crude oil costs. Trump accused oil firms of overcharging customers by not adjusting pump prices despite paying significantly less for oil, stating, "Gasoline prices better start going down a lot faster than what I’m seeing!" The President argued that the sharp drop in crude costs should result in immediate relief at the pump, alleging that customers are being gouged.

The national average for regular gasoline currently sits at $3.928 per gallon, according to AAA data. While this figure represents a decrease from $4.515 a month ago, it remains significantly above last year’s $3.224 average. The call for a federal investigation comes despite gasoline prices falling for six straight weeks, as Trump noted that pump prices have not dropped sufficiently relative to the decline in crude oil costs. The directive follows a recent Memorandum of Understanding (MoU) with Iran, which Trump credited for a record-breaking oil flow through the Strait of Hormuz and a subsequent decrease in oil prices.

The 'Rockets and Feathers' Effect

Nobel laureate economist Paul Krugman argued that the current price lag is a result of a well-documented market pattern rather than corporate malfeasance. Krugman described the phenomenon where fuel markets respond asymmetrically to international shocks. "When there is a global shock that causes the price of crude oil to soar, gasoline prices rise like a rocket," Krugman wrote. "But when the crisis is over and crude prices plunge, the price of gas declines only gradually — it drifts down like feathers."

Krugman noted that the timeline for economic relief clashes with the political calendar, predicting that gasoline prices will remain elevated for months. He suggested that the GOP might need to find "some lifejackets" ahead of the November midterms, as hopes for quick political relief are thwarted by the delayed drop in consumer costs.

Market Prices and Reserves

Global oil benchmarks showed declines, with Brent crude trading 1.52% lower at $75.63 per barrel and WTI crude futures down 1.67% at $71.99 per barrel. The United States Brent Oil Fund LP (BNO) has declined 22.65% over the last month, while the United States Oil Fund LP (USO) was 21.05% lower over the same period.

GasBuddy analyst Patrick De Haan indicated that concerns over the Strait of Hormuz could slow the pace of the price drop. He highlighted that the U.S. Strategic Petroleum Reserve (SPR) is set to hit a 43-year low based on upcoming Department of Energy (DOE) data. The reserve stands at approximately 47% of its 714 million barrel total capacity as of late June 2026. De Haan noted practical limits on extraction, estimating 150-170 million barrels as unrecoverable "heel" oil, with operational floors cited around 243 million barrels for emergency needs.

The Reserve Bank of India Governor has raised concerns about the stability of the recently established US-Iran truce, stating that the ceasefire remains fragile and that crude oil supply is expected to take time to recover. The remarks draw attention to the potential macroeconomic implications of continued volatility in global energy markets.

RBI Governor's Assessment of the US-Iran Truce

According to the RBI Governor, the truce between the United States and Iran is fragile in nature. This characterization signals that the geopolitical situation remains uncertain, with the potential for renewed disruptions that could affect global crude oil dynamics.

Crude Oil Supply Outlook

The RBI Governor further noted that crude oil supply is expected to take time to recover, reflecting the view that even with a truce in place, the normalization of energy supply chains is not immediate. The statement points to the complex relationship between geopolitical developments and commodity markets, particularly for a major oil-importing economy like India.