Victor Ortega RIO GRANDE VALLEY – In a Jan. 20 news release, the U.S. Department of Energy stated President Donald Trump’s push to increase national oil production is responsible for bringing gas prices down to its lowest point in the next five years.
However, KVAQ-TV spoke with Diego Escobari a UTRGV economics professor, who said it’s too early to tell.
“[It’s] an extremely, extremely difficult exercise to try to separate,” Escobari said. “Is this because the price was going down anyway or is it because of the current policy?”
Escobari said the effects of Trump’s policies will not be felt until the next five to ten years.
These policies include actions such as opening federal land for oil drilling and stopping state measures that aim to limit sales of gasoline-powered automobiles.
Although the U.S. Energy Information Administration stated America as the single biggest oil producer in 2023, Escobari explained supply and demand of this natural resource is mostly handled by other key international players.
“On the supply side we have [the Organization of Petroleum Exporting Countries]. Right. So, that is a cartel that controls about, depending on the time, about 40% to 50% of the supply,” Escobari said. “And then on the demand side, it’s typically people driving cars across the globe.”
Escobari said the effects of Trump’s policies will not be felt until the next five to ten years.
These policies include actions such as opening federal land for oil drilling and stopping state measures that aim to limit sales of gasoline-powered automobiles.
Although the U.S. Energy Information Administration stated America as the single biggest oil producer in 2023, Escobari explained supply and demand of this natural resource is mostly handled by other key international players.
“On the supply side we have [the Organization of Petroleum Exporting Countries]. Right. So, that is a cartel that controls about, depending on the time, about 40% to 50% of the supply,” Escobari said. “And then on the demand side, it’s typically people driving cars across the globe.”
According to the US Oil & Gas Association, the main factor behind gas prices is the global crude oil cost.
This natural resource’s price depends on the production of oil barrels across the world.
At the time of the Department of Energy’s news release, the national average for gas prices sat at $2.80 a gallon, 30 cents down from the average about a year ago.
Escobari shared the oil production in the RGV makes the region’s prices stand out in comparison to other parts of the country.
“Let’s say the gas prices might be to $2.20 per gallon in, let’s say, in the Valley. Probably in California, might be around four,” Escobari explained.
Escobari said that while the international market impacts current prices, the policies introduced by the president could have an impact but in the long run.
