Former President Trump’s re-election could potentially benefit oil companies, according to energy analysts. There are concerns about geopolitical tensions leading to price increases, but overall, the energy sector is optimistic about a rollback of regulations under a Trump administration.
Patrick De Haan, head of petroleum analysis at GasBuddy, believes that Trump’s re-election is a positive development for oil companies. However, there is a possibility of prices being affected if Trump imposes more sanctions on Iran. Phil Flynn, a senior analyst at Price Futures Group, highlighted the impact of potential sanctions on Iranian oil exports and the need for the US to fill that void in the global supply.
The Energy Information Administration (EIA) reported fluctuations in US refining capacity over the years, with a peak in 2020 followed by a decrease in 2021 and 2022. While there was an increase in capacity in 2023 and 2024, it has not yet returned to pre-pandemic levels. Phillips 66 recently halted petroleum refining operations at a facility, which could further impact refining capacity data.
Flynn cautioned that the loss of Iranian barrels could lead to higher prices and exacerbate the global supply deficit. Despite these concerns, both analysts predict a downward trend in prices in the near future. De Haan suggested that prices will likely hover around $3 per gallon in the summer before dropping below that mark by the end of the year. He also mentioned the possibility of Trump simplifying gasoline standards to potentially lower prices in the long term.
The current average cost of a gallon of regular gasoline stands at $3.12, slightly lower than the previous year’s average of $3.42. Flynn emphasized that while geopolitical risks could cause price spikes, factors like a stronger US dollar and increased domestic drilling efforts are helping to stabilize energy costs. Overall, the outlook for lower prices in the energy sector remains positive, with the hope of continued stability under a Trump administration.
