Wall Street’s projections are looking favorable for President Trump’s efforts to reduce energy costs through deregulation, among other strategies. Trump recently announced plans to unleash American energy resources to unprecedented levels, emphasizing the swift approvals of pipelines, drilling projects, and infrastructure developments during a press conference.
The United States currently stands as the top global oil producer, supplying around 20% of the world’s oil output. With both domestic and foreign energy production on the rise, any significant spikes in oil prices are expected to be limited. Tom Kloza, the OPIS global head of energy analysis, highlighted that the likelihood of a substantial drop in prices to $50 or $60 per barrel is much higher than a climb to levels exceeding $80. He noted that extreme events such as a Russian invasion of Ukraine or a broader conflict in the Middle East would be necessary to push prices back to the highs seen in 2022 or 2023.
Some analysts have suggested that crude oil futures could experience an upward trend if President Trump imposes sanctions on major oil-producing nations like Iran or Venezuela. However, JPMorgan’s Kaneva believes that Trump’s primary focus will be on maintaining low energy prices to prevent inflation triggers. She indicated that any policies potentially raising oil prices would likely be secondary to Trump’s core objective of keeping energy costs at bay.
Despite the downward trajectory in prices, the actual impact on energy expenses may deviate from the promises made by Trump during his campaign. While Trump had previously expressed optimism about gas prices dropping below $2 per gallon, analysts like GasBuddy’s Patrick De Haan do not foresee such significant declines in the absence of a severe economic crisis.
Looking ahead, the market could continue to follow a trend of year-over-year decreases from the peak witnessed in 2022 due to geopolitical events like the Russian invasion of Ukraine. The Energy Information Administration anticipates that gas prices will average around $3.20 per gallon in the coming year, slightly lower than the figures recorded in 2024.
