US President Donald Trump has ignited controversy by ordering an investigation into major energy companies, including British multinationals Shell and BP, over allegations they are profiteering from petrol prices despite a sharp drop in global oil costs. Speaking from the White House, Mr Trump lambasted energy firms for keeping pump prices artificially high, pointing out that "gasoline prices should be much lower at the pump" given the current market conditions.
The President's remarks come as wholesale oil prices have plummeted from their wartime highs following peace talks between Israel and Iran. Brent crude, the global benchmark for wholesale oil, surged to nearly $120 a barrel in May amid fears of disruptions to the critical Strait of Hormuz. However, with tensions easing, Brent crude has fallen back to approximately $74 a barrel – close to its pre-conflict price. Similarly, US WTI crude has also returned to levels observed before hostilities.
Despite this decline in wholesale costs, average petrol prices in the US remain stubbornly high at around $3.93 a gallon, having peaked at over $4 a gallon in April. Mr Trump believes that pump prices should be closer to $2.25 a gallon, suggesting consumers are being "gouged" by energy firms. He instructed the Department of Justice to probe these claims urgently, with a spokesperson for the department acknowledging its importance for national security and affordability – although not confirming an investigation.
The American Petroleum Institute (API), representing the US oil and gas industry, has contested these accusations, arguing that fuel prices at the pump do not move in lockstep with crude oil. Bethany Williams, an API spokesperson, acknowledged the industry's aim to provide relief at the pump but noted that the recent conflict continues to impact supply, refining, and inventories – all factors influencing retail prices.
This situation mirrors similar allegations faced by UK oil firms earlier this year following the Iran conflict, which led to petrol price rises in Britain. The UK's competition regulator investigated these claims in May and concluded there was no widespread evidence of price gouging, observing that average profit margins for retailers remained "broadly unchanged" between February and March.
The current US probe highlights ongoing international scrutiny of fuel pricing practices in a volatile global energy landscape, raising questions about the transparency and fairness with which wholesale price movements translate to the forecourt.