President Trump says oil companies should lower gas prices because they are "making too much money" amid the Iran War.
But do oil companies have the ability to do so?
"They do not," LSU Energy Institute director Greg Upton said, noting that even the largest oil companies in the world, including Exxon and Chevron, produce less than three percent of the oil in the world. "They really have no impact on what that global price is."
Upton told WWL's Tommy Tucker that Trump's decision to bomb Iran led to the shutdown of the Strait of Hormuz.
"That is a shipping lane for which about 20 percent of the global oil moves through there in order to exit the Middle East to enter the global marketplace," Upton said.
On top of that, Upton says those strikes knocked out refineries and other petroleum infrastructure, further reducing oil exports.
"And as a result of that, what we've seen is oil prices have increased, (and) gas prices have increase," Upton said. "People all around the world are paying higher prices for their energy, and the reason they are paying higher prices for that energy is because it is a global market for energy. When there are major supply disruptions--and I would definitely classify this as a major supply disruption--that puts upward pressure on those prices."
Those disruptions, Upton says, have put more pressure on the rest of the world's refineries, driving up costs and profits for the owners of those refineries.
"Those market prices: they're the market prices," Upton said. "Economists refer to companies as 'price takers.' That means they observe the market price, and that is the price for which they receive (oil)."
