Oil is nearing prewar prices. Why hasn’t gasoline followed suit?

Oil is nearing its prewar price after the U.S. and Iran agreed to a memorandum of understanding (MOU) intended to end the conflict, but gasoline prices remain significantly elevated. 

While President Trump has blamed Big Oil for price “gouging,” analysts say it’s individual gas station owners that are slow to lower fuel prices.

“The public is mad at the major oil companies because gasoline prices have not fallen as fast as the price of crude oil. … Their anger is misplaced,” Andy Lipow, president of Lipow Oil Associates, said in an email to The Hill.

“The oil companies own less than 5% of the service stations but their brands are sold at most of them. They should be mad at the local gasoline service station owner. They are making lots of money,” he said. 

Oil prices — and therefore gasoline prices — skyrocketed over the course of the war with Iran, with the national average gasoline price clearing $4.50 per gallon earlier this year. 

That’s because Iran was able to shut down the Strait of Hormuz, a key oil shipping lane through which about a fifth of global oil consumption typically flows.

A key tenant of the MOU is to allow the free flow of ships through the Strait of Hormuz, thought that in itself has been a difficult proposition to keep. Iran at the end of the week fired on a ship it argued was not going through the proper route, an effort to assert its authority over the waterway. The Trump administration responded by firing on Iran on Friday night.

As of Friday, before the latest U.S. military action, the U.S. benchmark West Texas Intermediate crude oil was trading at about $69 per barrel, virtually all the way back down to its........

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