How Trump's second administration could affect gas prices

Energy analysts projected that the re-election of Donald Trump could offer a potential boost to oil companies despite concerns that geopolitical tensions could lead to potential price increases.

Patrick De Haan, head of petroleum analysis at GasBuddy, posted on X that Trump's re-election is "net [positive]" for oil companies, as the energy sector is anticipating a rollback of stringent regulations. 

But he also said that it "could be bad for prices" if Trump hardens or adds more sanctions on Iran.

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Phil Flynn, a senior analyst at Price Futures Group and FOX Business contributor, said Iran has been exporting roughly 1.7 million barrels a day, and if Trump enforces sanctions on those barrels, it is "going to have to [be] made up somewhere."

OPEC could help with production but if not, it will be up to the U.S. to fill that void, Flynn said.

"The lack of new leases and inflation makes it harder for U.S. oil and gas to fil that void," he added, referring to how the U.S. government leases federally owned lands for oil and gas development.

According to the Energy Information Administration (EIA), U.S. refining capacity peaked in 2020, then decreased in 2021 and 2022. While capacity increased in 2023 and 2024, it hasn't returned to pre-pandemic levels. For example, refining capacity in 2020 was 18.98 million barrels per calendar day. The figure is around 18.38 million barrels per calendar day in 2024.

Phillips 66 stopped its petroleum refining operations at a facility in February, though that isn’t reflected in annual data yet, the EIA said.

"With global supplies well below average, the loss of Iranian barrels could lead to higher prices and could increase the global supply deficit." he added.

Still, both analysts project that lower prices are ahead.

While De Haan doesn't believe Trump’s promise of cutting energy prices in half is "realistic," he forecast prices will remain around $3 per gallon in the summer, before falling below $3 per gallon at the end of the year. 

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"This seems to be the new norm. Trump could choose to simplify gasoline standards, which could help ease prices in the long run."

The current average cost for a gallon of regular gasoline is $3.12, down from the $3.42 reported a year earlier. 

Flynn warned that geopolitical risk factors could result in price spikes but that a surge in the U.S. dollar and the hope that the U.S. will ramp up drilling is "slowing the cost of energy almost immediately."