Harvard Business School Economist Willy C. Shih Noted High Prices Bring More Supply to Market, Questioning, So Which Way Do You Want It?

President Donald Trump on Monday criticized U.S. oil majors Chevron and ExxonMobil for earning "too much money" from supply disruptions caused by the Iran war, urging them to cut retail prices or share windfall profits with consumers. Speaking in the Oval Office, Trump said, "I should be the last one to say [that] because I'm a big free enterprise guy, adding the companies should "give some of that back to the public, and they better cut the retail price. In Truth Social posts, he demanded oil companies "Get your consumer (retail!) Oil Prices DOWN, NOW!

The criticism follows second-quarter earnings: Exxon posted $14.5 billion in profit, more than double the comparable period in 2025, while Chevron's net income rose 380 percent to $12.1 billion. Global oil prices neared all-time highs this spring due to the Strait of Hormuz blockade, which typically carries about a fifth of global oil, and gas prices have since returned to a national average of $4.08 per gallon as of Wednesday, according to AAA. Bob McNally, president of Rapidan Energy Group, attributed the profits to the Iran war and shipping disruptions, plus Ukrainian attacks on Russian refineries.

In late June, Trump ordered the Justice Department to investigate potential price gouging, and the American Petroleum Institute rejected the accusations, with spokesperson Bethany Williams saying, "Gasoline prices don't move in lockstep with crude oil. The DOJ and FTC urged state attorneys general in a July 3 letter to join probes into potential anticompetitive practices. Experts suggest tools like a windfall tax, last used by President Jimmy Carter in the 1980s, or price controls from the Nixon era, but McNally doubts Trump will take such actions.

Harvard Business School economist Willy C. Shih noted high prices bring more supply to market, questioning, So which way do you want it? Do you want high prices (and profits for some players) to bring more supply onto the market or not?