Gas Prices Exhibit Stability Amid Declining Oil Prices Post-Trump Victory
After President Donald Trump’s recent electoral win, a narrative spread online suggesting gas prices dropped significantly. However, data reveals that this claim does not align with reality. Although U.S. crude oil prices have experienced a sharp decline recently, average retail gasoline prices have barely registered any movement. This disparity highlights the complex dynamics in the market, indicating that political changes do not necessarily lead to immediate impacts on fuel costs at the consumer level.
One tweet captured the premature optimism reflecting on the election outcome: “🚨 JUST IN: The ‘experts’ lose AGAIN as the price of oil is down 23%, gas down 5% since President Trump won the 2024 election… Democrats DO NOT live in reality. These trends will continue!” Such robust claims merit close examination.
Crude Oil Prices Drop Significantly
Since January 2024, benchmark U.S. crude oil prices, specifically West Texas Intermediate, have plummeted from about $80 per barrel to roughly $61 per barrel in early May—a staggering decrease of around 24%. This fall is primarily linked to increased global supply and diminishing demand forecasts rather than decisions made following Trump’s election.
OPEC+ countries, led by Saudi Arabia, announced plans to boost production on May 3, easing previous restrictions. Additionally, several major producers, including Iraq and Kazakhstan, had already been overshooting their production quotas. The prevailing economic uncertainty tied to potential tariffs anticipated under Trump, along with weakening global manufacturing projections, has further contributed to diminished expectations for oil consumption.
“Trade conflict expectations are already weighing on global demand outlooks,” said Mukesh Sahdev, head of oil trading research at Rystad Energy. “Comparing this year to last year has become largely irrelevant.” Consequently, oversupply in the global petroleum market coincides with declining demand, pulling crude prices lower.
Gasoline Prices Remain Stagnant
Despite the steep drop in oil prices, relief for consumers at the gas pump has been modest at best. Data from GasBuddy indicates that as of May 12, the nationwide average retail price for gasoline stood at approximately $3.12 per gallon, just slightly above the $3.11 average recorded on January 20, the day Trump took office.
Forecasts hint at a slight easing to around $3.08 by Memorial Day weekend, which translates to merely a 1% reduction over the four-month span—a far cry from the claimed 5% drop in gas prices.
“Gasoline prices don’t fall nearly as fast as oil does,” noted Clark Williams-Derry, an energy finance analyst. “Gas stations that buy expensive gasoline won’t always lower their prices until they buy a new shipment of cheaper gas.” This phenomenon, often termed the “rockets and feathers” effect, emphasizes how gas prices rise swiftly but fall much more slowly due to various market factors, including supply chain contracts and limited refinery capacity.
Long-Term Strategy from the White House
Treasury Secretary Scott Bessent, in a May 18 interview, asserted that “gasoline prices have collapsed under President Trump,” echoing concerns expressed by Walmart CEO Doug McMillon regarding consumer worries about fuel expenses amid looming tariff issues. McMillon suggested that “with their consumers, the single most important thing is the gasoline price.”
However, Bessent’s statements lack corroboration from national pricing data. Analysts caution that anticipated tariffs under Trump’s proposed trade policies may ultimately reduce global demand, which could lower oil prices, yet this has yet to result in noticeable decreases in retail gasoline prices.
The White House responded to these remarks by acknowledging the short-term price fluctuations but defending an overarching strategy aimed at long-term cost reductions. “Prices are going to move up and down in the short term,” a spokesperson stated, adding that Trump’s agenda is focused on lowering production costs for U.S. oil, which could eventually lead to reduced prices at the consumer level.
Market Traders Display Caution
Following Trump’s electoral victory on November 6, energy futures markets exhibited little change, signifying skepticism about an immediate shift in energy dynamics. Futures for June 2025 crude oil maintained a steady price of around $70 per barrel, while natural gas futures displayed a similar trend near pre-election levels without significant movement.
This lack of volatility indicates that if traders believed in the feasibility of Trump’s promises to dramatically increase U.S. oil and gas production, they would have adjusted futures prices to reflect anticipated oversupply and falling prices. Instead, the steadiness in prices signals doubts about the pledges made.
“As the election results became clear, there was essentially no change in the price of crude oil seven months in the future,” a report analyzing NYMEX trading data revealed. “Steady futures prices suggest market skepticism about Trump’s claims.”
This skepticism stems from prevailing economic challenges. A survey conducted by the Dallas Federal Reserve conveyed that oil producers require pricing to be at least $64 per barrel to justify the risks of new drilling ventures. With prices hovering around that mark, many producers might hesitate to undertake new, potentially costly drilling efforts without a guarantee of profitability.
Impact of Lower Oil Prices on U.S. Producers
A declining oil market could harm domestic energy producers, as companies like Diamondback Energy have warned that U.S. onshore crude output may have just reached its peak and is likely to start declining this quarter if prices remain suppressed.
“It is likely that U.S. onshore oil production has peaked and will begin to decline this quarter,” Diamondback’s investor statement declared.
While lower oil prices benefit consumers, they pose challenges for American energy companies, particularly smaller operations with less efficiency. This strain impacts job growth and capital investment in energy-centric regions, including West Texas, North Dakota, and the Gulf Coast.
Even Trump’s enthusiastic endorsement of increased production, often encapsulated by the phrase “Drill, baby, drill,” may falter in the face of prevailing economic realities if producers find it difficult to cover operational costs.
Upcoming Policy Conflicts
As Trump looks to reintroduce sweeping tariffs and deregulation, conflicting objectives arise—namely, the goal of affordable fuel versus strong domestic production. Tariffs have the potential to dampen global demand, thereby lowering oil prices, yet they also introduce uncertainty that could deter investment. This situation casts doubt on whether consumers will see immediate or consistent reductions in fuel prices.
Additionally, the administration’s proposed rollbacks on clean energy incentives, particularly from the Inflation Reduction Act, are expected to alter the landscape of commodity markets. With plans to rescind unspent funds from the IRA, Trump’s actions are anticipated to have implications for critical minerals needed for electric vehicles and other clean technologies.
In the end, while these policy shifts may eventually create conditions for lower consumer energy costs, they have yet to manifest in everyday gas prices.
Conclusion
The assertions of an impressive drop in gasoline prices since Trump took office fail to withstand scrutiny. Although crude oil prices have significantly fallen since the 2024 election—largely due to market dynamics and OPEC+ decisions—gas prices have remained stubbornly stable, offering little relief for consumers at the pump.
For the time being, the fluctuation in prices seen at gas stations resembles more of a gentle drift rather than a swift drop. The broader energy sector faces a mixed bag of signals: benefits for consumers are weighed against difficulties for producers. The question of whether Trump’s energy policies will drive down costs comprehensively is one still waiting for resolution, with developments in energy policy likely to continue shaping this landscape.
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