The Donald Trump administration intensified scrutiny of the petroleum industry by urging state officials to investigate whether oil companies or fuel retailers are unlawfully keeping gasoline prices elevated despite falling crude oil costs. The Department of Justice and the Federal Trade Commission sent a July 3 letter to state attorneys general encouraging them to use “all tools available” to investigate potential violations of antitrust or consumer protection laws. Associate Attorney General Stanley Woodward Jr. and FTC Chair Andrew Ferguson stated that federal authorities are “closely monitoring petroleum markets” for violations, emphasizing that recent volatility in crude oil prices does not authorize companies to manipulate retail prices or collude with competitors.

Trump Presses Oil Industry As Pump Prices Remain Elevated

President Donald Trump has repeatedly criticized the pace at which gasoline prices have declined, arguing that consumers are not benefiting quickly enough from lower oil prices. Earlier this week, Trump wrote on Truth Social, “Gasoline Retailers must get their Prices down, IMMEDIATELY!” He claimed customers were being “gouged” and said he had directed federal prosecutors to investigate potential price manipulation by oil companies. The national average gasoline price stood at $3.82 per gallon as of Friday afternoon, while motorists in several West Coast states and Hawaii were still paying more than $5 per gallon.

Chevron Says Lower Gas Prices Take Time To Reach Consumers

Oil companies have pushed back on the administration’s criticism, arguing that gasoline prices typically lag changes in crude oil markets. Chevron Corp.’s Chief Financial Officer Eimear Bonner told CNBC that while the company expects pump prices to ease as markets stabilize, “It’s going to take time though. There is a lag between … oil prices and reductions in oil prices and when that shows up at the pump.” The administration has not accused any specific company of wrongdoing, but its latest directive signals increased federal and state scrutiny of the industry’s pricing practices.

Regional Price Breakdown

Price disparities remain evident across the United States, with some states experiencing significant spikes despite the national average trending downward from recent highs.

Benchmark crude has slipped below levels seen before the outbreak of the Iran war, masking a tightening physical market characterized by evaporating inventories and a looming supply shock. Net speculative length has collapsed from 511 million barrels to 162 million, a retreat to positioning last seen before the latest supply scare, according to Eric Nuttall, a Senior PM at Ninepoint Partners. Despite the bearish price action, the market has shifted from a 177-million-barrel surplus to a 141-million-barrel deficit relative to the 5-year average, with floating storage fully absorbed.

Domestic commercial crude inventories are near their lowest levels since at least 2016, and the Strategic Petroleum Reserve is at its lowest level since 1983. This tightness suggests that recent price weakness may be temporary rather than indicative of a structural surplus.

Demand and Supply Dynamics

China accounted for 74% of the worldwide decline in crude imports by May, according to Ken Chao, CIO of YCC Capital. Data for June shows Chinese oil imports were down 4.9 million barrels per day year over year. However, downstream indicators such as US crack spreads—hovering around $57 a barrel near the $59 record—along with mobility data and refinery margins, point to resilient demand.

"You cannot drop your imports by 5 million barrels per day when your domestic demand remains very strong," Nuttall said. "And so, the thought is that they’ve been depleting invisible stocks of refined product… eventually they will have to come back to the market."

On the supply side, restoring production after shutdowns is difficult due to the need for pressure management, infrastructure repairs, and time. Extended shutdowns can permanently damage reservoir performance. Nuttall estimates that about 9.4 million barrels a day of Middle Eastern production remains shut in or curtailed.

Long-Term Investment Risks

Veteran investor Rick Rule warns that producers have been underinvesting in sustaining capital by a billion dollars a day, a mismatch that could drive future prices. Rule believes the market is overlooking the 2029–2030 setup, focusing instead on recent chart performance. "We’re going to have a spectacular buying opportunity," he said.

Potential beneficiaries include industry leaders such as Schlumberger and Halliburton, as well as the VanEck Oil Services ETF. "It isn’t just the repair of the stuff that’s been blown up. It’s the fact that in the early part of the decade of the 2030s, we’re going to need to make up for that deferred sustaining capital investment," Rule concluded.