The energy policies of the new U.S. president will be critical to how wider global events play out in the coming four years. During his term, President Trump sought to enforce a 'Trump Oil Price Trading Range' with the lower part set at around $40-45 per barrel of Brent and the upper part at $75-80 per barrel. The chance of the U.S. economy being in recession within two years of an upcoming election is dramatically increased as the oil and gasoline price rises. Both Kamala Harris and Donald Trump are likely to agree that these prices should be kept in check. The sitting U.S. president has historically won re-election if the economy was not in recession within two years of an upcoming election. However, presidents who went into a re-election campaign with the economy in recession won only one time out of seven. Longstanding estimates suggest that every $10 per barrel change in the price of crude oil results in a 25-30 cent change in the price of a gallon of gasoline. A 10 cent increase in gasoline prices has been correlated with a 0.6 percent decrease in presidential approval. Trump vigorously enforced the 'Trump Oil Price Trading Range' and warned Saudi Arabia to stop pushing oil prices above $80 per barrel of Brent. The first half of Joe Biden's presidency was able to keep this price range intact, but it was significantly broken to the upside following Russia's invasion of Ukraine.
In light of the upcoming 2024 elections, Trump has proposed increasing energy production as a means to lower energy prices significantly, claiming that this could cut prices in half within 12 months of taking office. He emphasized the need for increased drilling for oil and natural gas during recent speeches in Detroit and at a town hall meeting. However, experts have expressed skepticism regarding the feasibility of this promise, citing the influence of global market dynamics on oil prices. U.S. oil production reached over 12.9 million barrels per day in 2023 and is projected to rise to 13.2 million in 2024. Despite this increase, average gasoline prices peaked at over $5 per gallon in June 2022 but have since decreased to around $3.14. Under Biden's administration, household energy costs have risen by 29%, and the average monthly residential electric bill has increased from $117 in 2020 to $138 in 2023. Trump's energy policies include rolling back regulations and expediting drilling permits, but experts argue that merely increasing U.S. production may not lead to significant price reductions due to the complexities of the global market. Notably, the low gas price of $1.87 cited by Trump occurred during the COVID-19 pandemic, and when he left office, gasoline prices were at $2.38 per gallon. [b580a168][8d09e881]