Chevron Corp.‘s (NYSE:CVX) Chief Financial Officer Eimear Bonner has forecasted a gradual but eventual drop in U.S. gasoline prices as the situation in the Middle East stabilizes.
Bonner, addressing criticism from President Donald Trump, told CNBC on Thursday that energy companies are making every effort to rectify the situation, but warned that it would take time for fuel prices to decrease.
“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, but we expect that prices will come down as things continue to normalize,” Bonner said.
The CFO was asked whether large energy companies could do more to bring down gas prices in the short term. “…majors are doing everything that we can. I’ll talk for Chevron, and we’re growing this year. We’re going to grow production at 7% to 10%,” Bonner responded.
Bonner said Chevron continues to optimize its operations despite the conflict, emphasizing the company’s commitment to maintaining reliable energy supplies.
Experts Explain Gas Price Lag
Bonner’s comments come in the wake of Trump’s directive to the Department of Justice (DOJ) to investigate oil companies for failing to reduce gasoline prices in line with declining crude oil costs. Trump accused oil companies of overcharging customers by not adjusting their pump prices in accordance with the significantly lower prices they are paying for oil.
Speaking at the White House on Wednesday, Trump said major oil companies such as Chevron, Exxon Mobil Corp. (NYSE:XOM), Shell Plc (NYSE:SHEL), and BP Plc (NYSE:BP) should do more to lower fuel costs, arguing that gasoline prices should be around $2.25 per gallon and are currently too high.
The national average for regular gasoline currently stands at $3.918 per gallon, down from $4.515 a month ago, but still significantly above last year’s $3.224 average, according to AAA data.
At the time of writing, Brent crude oil price was trading 0.78% lower at $72.50 per barrel, while the WTI crude futures were trading 1.02% lower at $69.62 per barrel.
Nobel laureate Paul Krugman outlined a “well-documented pattern” in how fuel markets respond to international shocks, explaining the lag in the decrease of pump prices. He argued that gasoline prices typically rise rapidly when crude oil prices spike during a crisis but fall much more slowly after crude prices decline.
At the same time, Karen Young of Columbia University told CNBC that lower crude oil prices do not immediately translate into cheaper gasoline, as pump prices are also influenced by taxes, refining and distribution costs, and typically take weeks to adjust.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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