Washington, D.C. May 11, 2025
In a surprising twist that underscores the complex interplay between politics and energy markets, Donald Trump’s recent push for significantly lower gasoline prices is causing disquiet in the very industry he has long praised: the U.S. oil and gas sector.
Trump, who remains a central figure in Republican politics and a potential 2024 presidential frontrunner, has reignited his calls for $2 per gallon gasoline, blaming current economic policies for higher prices at the pump and vowing to reverse the trend if reelected. At recent campaign events in Texas and Ohio, he declared:
“When I was in office, Americans paid less than $2 for gas. That’s what strong leadership and American energy dominance looks like.”
Yet behind closed doors, many of his former allies in the oil industry are alarmed.
A Relationship Built on Deregulation, Now Under Pressure
Trump has historically been one of the most pro-oil presidents in U.S. history. During his tenure from 2017 to 2021, his administration rolled back environmental regulations, approved new pipelines, and offered unprecedented access to federal lands for drilling.
This earned him widespread support among oil executives and energy lobbyists, with major oil-producing states like Texas, North Dakota, and Oklahoma delivering strong electoral wins in both 2016 and 2020.
However, Trump’s current rhetoric is revealing a fissure in this alliance. By pressuring the industry to increase production and reduce prices, Trump is at odds with the capital discipline approach U.S. producers have adopted post-pandemic. Instead of “drill, baby, drill,” many oil companies now focus on limiting supply to maintain profitability and protect shareholder value.
“There’s a big difference between campaigning on cheap gas and governing for energy independence,” said Robert McNally, a former White House energy advisor and founder of the Rapidan Energy Group. “Pushing for low prices in today’s environment could destabilize the very companies he once championed.”
Market Realities vs. Political Messaging
The global oil market operates on thin margins of supply and demand, often influenced by geopolitical events and decisions made by powerful groups like OPEC+. Oil prices have stabilized in the $75–85 per barrel range over the past year, providing U.S. shale producers with predictable returns.
But returning to $2 gasoline, as Trump proposes, would likely require oil prices to fall well below $60 per barrel—a level that would threaten the viability of hundreds of independent producers and put pressure on oilfield service companies and suppliers.
“The math doesn’t add up,” noted Helima Croft, managing director and global head of commodity strategy at RBC Capital Markets. “You can’t have a strong domestic energy sector and artificially low prices unless you heavily subsidize or manipulate the market.”
The contradiction is becoming more apparent. The American Petroleum Institute (API), which often backed Trump’s initiatives in the past, has remained noticeably silent on his recent price demands, suggesting internal unease about the potential ramifications.
Geopolitical Implications and OPEC Strategy
The timing of Trump’s messaging is particularly sensitive. Global oil markets are still digesting the implications of the Russia-Ukraine conflict, which has disrupted supply chains and caused realignment in global crude flows. The U.S. Strategic Petroleum Reserve (SPR) remains at historically low levels after aggressive drawdowns in 2022 and 2023.
If the U.S. were to flood the market with supply—either through policy pressure or direct incentives—it could trigger retaliatory actions from OPEC and its allies, who might respond by cutting output to protect their own revenue streams. That scenario could create a repeat of the 2020 oil price crash, when the Saudi-Russia price war caused crude prices to briefly go negative in U.S. futures markets.
According to a Bloomberg report, industry leaders are privately warning Republican strategists that another price war would be disastrous for domestic producers, especially smaller shale operations in the Permian and Bakken regions.
Investor Anxiety and Market Reaction
Investor sentiment in the energy sector has also become more cautious in recent weeks. Major oil and gas stocks have seen increased volatility, with firms like Chevron (CVX) and Pioneer Natural Resources (PXD) seeing minor selloffs amid fears of price instability.
Wall Street analysts are sounding alarms. A report by Goldman Sachs indicated that oil companies may delay new investments in upstream projects if political pressure for lower prices intensifies.
“Energy policy uncertainty—especially during an election cycle—can lead to project delays, hiring freezes, and downstream impacts on local economies in oil-producing states,” said Jeff Currie, former head of commodities at Goldman.
Public Support vs. Industry Loyalty
Despite industry discomfort, Trump’s rhetoric on gas prices continues to resonate with voters. Surveys from Gallup and Pew Research show that fuel costs remain one of the top three financial concerns among American households.
In this context, Trump’s call for cheaper fuel plays well politically, especially in battleground states where economic hardship is a pressing issue. It’s a populist appeal that puts pressure not just on oil executives, but on his political opponents—forcing them to address the balance between climate goals and energy affordability.
Still, this strategy risks alienating one of the GOP’s most reliable donor bases. According to the Center for Responsive Politics, the oil and gas industry contributed over $50 million to Republican candidates in 2020, making it one of the party’s largest funding sources.
Looking Ahead: An Energy Policy Crossroads
As the 2024 election cycle gains momentum, Trump’s energy platform remains a paradox. He promises to boost fossil fuel production while demanding prices that may only be achievable through market manipulation or global conflict resolution.
Analysts expect this tension to sharpen in coming months, particularly as oil companies begin rolling out their Q2 earnings reports, which will reflect market sentiment and any hesitations about long-term capital investment.
If Trump secures the nomination, the 2024 election may turn into a referendum on U.S. energy policy—with consumers cheering lower prices while producers and investors brace for instability.
“Trump built a legacy on promoting U.S. energy, but his latest demands could undo much of that progress,” said Sarah Emerson, president of ESAI Energy. “You can’t govern an energy superpower like a gas station.”
