The Truth Behind Trump’s Alleged Support for Higher Gas Prices: A Dive Into History

Recent discussions have revolved around whether Donald Trump truly wanted higher gas prices, or if this is simply a rumor latched onto by critics. Digging into historical events and economic decisions, we find a complex web of political decisions and market influences that shape the current state of the American oil industry and global gas prices.

Trump’s Negotiations with OPEC: A Timeline of Events

Back in 2017, President Donald Trump engaged in negotiations with OPEC, the Organization of the Petroleum Exporting Countries, to increase the production of oil by 10 million barrels a day. These negotiations set off a production war, primarily between Saudi Arabia and Russia. The goal was to lower oil prices, making it cheaper for American oil companies to compete in the global market.

Impact on American Oil Companies

The drop in oil prices was detrimental to American oil companies. Oil production in America is significantly more expensive than in Saudi Arabia and Russia. As a result, the price drop made it impossible for many American oil companies to compete. Over 100 American oil companies filed for bankruptcy protection due to the drastic price reduction.

2020: Another Deal to Arouse Suspicion

In early 2020, Trump made another deal with OPEC and Russia to decrease production by 8 million barrels a day. This move was shrouded in controversy, with some speculating that the deal with Russia was to allow Putin to attack Ukraine without additional support from America, as long as Trump was reelected.

The Pandemic's Impact

The pandemic hit the global economy in full force, leading to a significant decrease in oil demand. This led to a collapse in oil prices, which rose again post-pandemic due to the 2020 deal. This price increase is a significant factor in the current gas price landscape.

Trump’s Public Statements on Oil Prices

There are videos and statements of Trump bragging about saving the American oil industry through these deals. However, it is clear that he failed to mention that his actions were the reason the American oil industry was failing. A YouTube video titled “Trump brags about saving the American oil industry” showcases his claims.

Public Perception

Many critics point to Trump’s statements about low oil prices hurting American companies, suggesting a lack of understanding of the complexities involved in the oil market. It is also important to note that Trump wanted to prevent the collapse of the American oil industry due to the drop in demand caused by the pandemic.

The Oil Wars of 2020

Starting from January and February 2020, the world began to see the early signs of the novel coronavirus (COVID-19). The following months saw significant cutbacks in almost all sectors, leading to a drastic drop in oil demand. In February and March 2020, Saudi Arabia asked OPEC to cut production significantly to match supply with demand.

Peter Putin, the leader of Russia, refused to cut production, causing tensions to rise. Saudi Arabia responded by drastically increasing oil production and leasing out storage facilities, leading to a significant crash in oil prices. This was perceived as a strategic move to weaken Russian economy.

The Emergency Response

As the situation escalated, Trump and other global leaders initially supported the oil war. However, the global oil companies realized they were in a severe financial crisis. Saudi Arabia, on the other hand, remained a significant player in the market, buying out oil companies and stock to stabilize the market.

The Turning Point

Tensions continued to rise until April 2020, when Saudi Arabia and Russia faced a crisis. Trump played a critical role in negotiations, threatening to pull American troops out of Saudi Arabia if Russia and Saudi Arabia did not agree to a production cut. The negotiations culminated with OPEC agreeing to a record 10 million barrel/day production cut, a move that had far-reaching economic implications.

Implications of the Deal and Aftermath

Without Trump's intervention, Saudi Arabia would have had an undisputed control over the global oil market. This could have led to unprecedentedly high oil prices, potentially reaching 200 barrels per barrel. The deal not only stabilized the oil market but also ensured that the US and European oil industries remained independent.

The deal also indirectly led to geopolitical tensions, particularly with the Russian invasion of Ukraine in 2022, which further increased oil prices. The current state of gas prices can be traced back to these political and economic decisions made during the early 2020s.

Understanding these historical events helps to sheds light on the complex relationship between politics and the oil market. It also highlights the significant role of global leaders in shaping economic trends and the unpredictable nature of the oil industry.

As we continue to navigate the complexities of the global economy, the lessons from these events remain crucial for policymakers and businesses alike.