Chevron says U.S. gas prices will normalize as Trump probes Big Oil
Fuel prices in the U.S. remain under political pressure as oil markets adjust to easing tensions in the Middle East. Chevron says lower crude prices take time to filter through to consumers, even as President Donald Trump pushes for a rapid drop at the pump.
Highlights
- Chevron CFO Eimear Bonner forecasts U.S. gasoline prices will decrease as Middle East conditions normalize, though there is a lag in price transmission.
- Chevron expects to boost production by 7% to 10% in 2024, maintaining output through geopolitical volatility to support supply and stabilize consumer prices.
- President Trump orders the Department of Justice to investigate Chevron, Exxon Mobil, Shell, and BP for alleged price gouging, asserting gasoline should cost $2.25 per gallon.
Chevron outlook and pricing lag
As reported by CNBC, Chevron Chief Financial Officer Eimear Bonner says the oil major expects U.S. gasoline prices to fall as conditions in the Middle East continue to normalize.Bonner tells CNBC's "Squawk Box Europe" that energy companies are concerned about consumer costs in the U.S., UK and Europe, but adds that there is a lag between changes in crude prices and when those reductions appear at gas stations. She says Chevron expects pump prices to come down over time as market conditions improve.
Asked whether large oil producers can do more in the near term, Bonner says the majors are doing everything they can. She says Chevron is growing this year and plans to increase production by 7% to 10%, while continuing to optimize operations through the conflict to keep energy and refined products flowing to consumers.
White House pressure on oil majors
Trump says he orders the Department of Justice to immediately investigate major oil companies, accusing them of gouging consumers by not cutting gasoline prices in line with the recent drop in crude oil prices.Speaking at the White House on Wednesday, Trump names Chevron, Exxon Mobil, Shell and BP and says gasoline prices should be much lower, adding that they should stand at $2.25 per gallon. A Department of Justice spokesperson tells CNBC by email that fuel prices are both a national security issue and a direct burden on American households, and says the administration remains committed to affordability.
Our earlier article on Brent crude’s retreat from its wartime spike explained how improved tanker traffic through the Strait of Hormuz, alongside progress in U.S.-Iran talks, quickly erased much of the conflict premium. We noted that the market shifted from fearing supply disruptions to worrying about oversupply as more barrels from the Middle East and Africa reappeared, even as some Hormuz-related risks lingered.
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