With tensions in the Middle East slowly unwinding, President Trump wants to see the step-down in oil prices reflected at the pumps for American consumers. In fact, he’s ordered a Department of Justice probe into the issue to find out why gas isn’t already cheaper.

In a Truth Social post early this morning, Donald Trump wrote that oil prices are “dropping like a rock,” but “the big oil companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for oil.”

Consumers are being “gouged,” the president added, and as such: “I have instructed the DOJ to immediately start looking into this. Gasoline prices better start going down a lot faster than what I’m seeing!”

Trump did not share any further details of the probe or which companies will be investigated.

Crude oil prices have been falling sharply for the past month, down from $104 a barrel to just under $76 at the time of writing, a drop of 27%. Meanwhile, gas price data from the AAA shows the national average for regular gas is now $3.93 a gallon, dropping below $4 for the first time since March 30.

Gas prices have been falling: A month ago, a gallon of regular gas cost $4.52, while diesel cost $5.62 (it has since dropped to just below $5 a gallon). Gas prices haven’t dropped at the same pace as oil; the month-on-month drop for regular gas is approximately 13%.

There are mitigating circumstances: Firstly, oil price shocks take some time to filter through to consumer prices. As Hakan Yilmazkuday wrote in the Journal of International Money and Finance in 2021, U.S. data suggest that oil price pass-through into gasoline retail prices is about 13% after a week, 37% after three months, and 50% in the long run.

Likewise, questions hanging over oil supply are far from over. President Trump wrote on Truth Social overnight that he has Iran “on the ‘ropes,’ ready to go down for the fall, willing to give us practically anything, and for the first time in decades, respecting the hell out of the United States and its President, ME.”

However, planned talks between the U.S. and Iran have already been abruptly interrupted in the past—only on Friday, they came to a halt following violence between Israel and Hezbollah.

The disarray means ships carrying that all-important oil supply are still unsure whether it is safe to travel out of the Gulf and through the Strait of Hormuz. According to analysis by the BBC, less than a third of the ships previously crossing the Strait are traveling at the moment.

Bessent’s concern

Treasury Secretary Scott Bessent has also been talking about the affordability challenges U.S. consumers face. This isn’t a surprise—after all, it’s one of the key motivations many people had for voting for President Trump.

As Paul Donovan at UBS noted to clients this morning: “Trump’s political challenge is that gasoline prices remain above the pre-war $3 per U.S. gallon, which U.S. consumers are inclined to remember as the ‘fair’ price.”

While not addressing oil prices in particular, Bessent told the Economic Club of New York in remarks yesterday that “supply chains are the domain in which that leadership is tested.”

“For years, the question that seemed to consume both our political and commercial class was: Where is the lowest cost? That question still matters, but it is no longer sufficient,” he explained. “We must also ask: Can this supply chain survive a crisis? … Does it depend on a country that could use economic leverage against us?”

Iran has certainly used the Strait of Hormuz as a weapon against the U.S. in the Middle Eastern conflict, causing upward pressure on oil prices despite the States being a net petroleum exporter.

Supply chain resilience doesn’t mean being entirely domestic, Bessent added, which would be “unrealistic and unnecessary.” It does, however, force policymakers to know where vulnerabilities lie to avoid a crisis. He explained: “It requires diversifying away from dangerous concentrations. And that we build enough capacity at home to ensure that the American people are never at the mercy of a foreign chokepoint abroad.”