DOJ asks states to join oil-price collusion probe as pump prices slip and OPEC lifts August output
The Justice Department asked state attorneys general this week to join its investigation into oil companies, widening a federal price-fixing inquiry into a joint state-federal effort. Bringing the states in could stretch the inquiry out for years. For US jobbers and marketers, the near-term question is simple: does the probe stay aimed at the majors and refiners, or does it start pulling supply contracts and rack pricing from the middle of the chain into the record.
The timing lines up with a global mood. South Korean prosecutors just charged all four of that country's refiners, plus four employees, with collusion that they say caused $17 billion in harm, alleging two of them coordinated the size and timing of price increases after the Iran war broke out in late February. US enforcers do not need Seoul's case to run their own, but the parallel is loud, and it gives the DOJ political cover to push harder.
The pump
Gas prices kept sliding across most of the country. Ithaca fell 7 cents a gallon. Birmingham prices kept dropping. Minnesota dipped to $3.59, a bit under the national average. The trend is softer money at the register, and it is showing up in city-level roundups from the Southeast to the Upper Midwest.
Not everywhere moved the same way. Chattanooga rose about 5 cents over the week, a reminder that regional supply and local margins still cut against the national line. For operators, the split matters more than the average. If your market is following the national slide, your street price and your inside-store traffic both feel it. If you are the outlier that went up, you are the one fielding the customer complaints.
Retail demand held up anyway. One consumer read this week showed shoppers still spending even as fuel costs bite, which is the story c-store operators care about most: fuel gets people onto the lot, and the store makes its margin on what they buy inside.
OPEC's August barrels
OPEC decided to boost production again in August, its latest step in unwinding the cuts. More barrels into a market where US pump prices are already easing points toward continued softness at the wholesale level, though nothing here is a promise. Crude could firm again fast if the supply picture on the other side of the world gets worse, and right now it is getting worse.
Russian refineries
Ukraine hit Russian refining and export infrastructure hard this week, and the target list ran long: the Yaroslavl refinery struck again, a refinery near Kaluga, oil terminals at Vysotsk on the Baltic, storage tanks and hangars in Crimea, and drones reaching Chelyabinsk for the first time. News outlets reported strikes on multiple refineries and at least two oil terminals. Ukrainian officials confirmed the Yaroslavl hit directly. Reporting also said US intelligence data guided some of the drone strikes.
The strikes matter to US marketers for a straightforward reason. Every Russian refinery knocked offline pulls product off the world market and tightens the diesel and gasoline balance that sets global benchmarks. Russian barrels do not flow to US racks, but the price of the barrels that do is set against a global pool, and that pool is losing capacity a terminal at a time. If OPEC's added crude is the loosening force this month, the strikes are the tightening one. Which wins out could decide whether the pump slide continues into August.
Diesel
Diesel relief still has not reached the people hauling freight. EU diesel is running 8.1% above its baseline, and European hauliers have not seen the drop that lower crude was supposed to hand them. The US read is more mixed, with Minnesota's number sitting just under the national average, but the European lag is worth watching because it shows how sticky distillate can be even when crude eases. Refinery outages abroad keep a floor under diesel that gasoline does not always share.
The 7-Eleven portfolio
Realty Income's net-lease book now holds thousands of 7-Eleven and related convenience properties, one of the more visible retail assets in its portfolio. Most operators think about this real estate side of the c-store business only when their lease comes up for renewal. The scale here says the same thing the demand numbers do: big capital treats convenience-and-fuel real estate as a durable rent stream, backed by tenants it considers among the strongest in retail. For an independent, that is both a benchmark and a warning about who you are competing against for the good corners.
E15 and ethanol
Phillips 66 is pushing E15 harder, marketing the up-to-15% ethanol blend for model year 2001 and newer vehicles at a price that flashes slightly below regular on the dispenser. More E15 on the street means more ethanol demand, and biofuel prices are starting to draw fresh attention as blenders and marketers watch the spread between ethanol and straight gasoline. For a retailer, the pitch is a lower posted price and a higher-octane story on the pump. The catch is the same as always: dispenser labeling and the older-vehicle exclusion, which can cause some customer confusion at the island.
What to watch
Watch whether more state attorneys general sign onto the DOJ probe, and whether the demands start reaching past the majors into refiner supply contracts and rack pricing. Watch the Russian refinery count. If strikes keep taking terminals and processing offline, the global product balance tightens no matter what OPEC adds in August. Watch diesel specifically, since Europe's 8.1% premium shows distillate can stay firm while gasoline eases. Watch whether the US pump slide holds into next week or whether an outlier like Chattanooga becomes the pattern. And keep an eye on ethanol economics as E15 gets more shelf space, because the blend spread is what decides whether pushing it makes money.