Gas prices are now the lowest they’ve been in about a year, according to a Nov. 24 edition of The Wall Street Journal. This beckons the question: Who do we have to thank for this? President Trump believes he is responsible for the sharp drop in oil prices. After all, he is the president, and he did take the bulk of the blame for high gas prices two months ago. This saga plays out year after year, and few people really understand what causes gas prices to rise and fall. Often, the praise and the blame go to the president, even if they had very little to do with these fluctuations.
Just like every other good or resource in our society, gas prices are driven by supply and demand. This is why we see seasonal fluctuations in gas prices. In the warmer summer months, people are out traveling and using gas more frequently. This creates a high demand for gasoline while having a limited supply, which causes gas prices to rise. In cold winter months, people are traveling less. This creates a lack of demand and a supply surplus, which causes gas prices to fall. Gas prices have trended this way for a long time and will continue to trend that way. As we enter the month of December, it’s important to keep in mind that this is about the time of year where gas prices are annually lower. There really isn’t anyone to blame for this, it’s just how our economy works.

While we are seeing lower gas prices right now, let’s not forget that we saw the gas prices hit their highest since 2014 at the beginning of October. According to a Sept. 25 edition of The Wall Street Journal, the biggest reason for this spike in gas prices are the tariffs levied upon Iranian Oil. Obviously, we have not had great relations with Iran since pulling out of our nuclear agreement. Unfortunately, Iran is one of the leading suppliers of oil in the world, so putting tariffs on their oil has really affected our gas supply. By lowering our supply during a time when there is still higher demand (September-October), we see an inevitable hike in gas prices. So, while we are now thanking the president for lower gas prices, we were certainly not praising him or his tariffs two months ago.

So why are gas prices so much lower now than they were two months ago. One reason is the change in season (which I alluded to earlier). Another big reason is perhaps the actions of President Trump. Trump has claimed to be getting after Saudi Arabia to increase oil production.

According to FactCheck.org, we actually saw Saudi Arabia publicly say that they plan to increase oil production around the end of October. This was great news for us consumers because now there is a greater supply of oil just in time for the winter months (less demand + greater supply = lower prices). This has proven to be a real game changer, and something President Trump can use to boost popularity.

Depending on which side you’re on, you may feel that Trump fixed the rising gas price issue, or you may feel that Trump got bailed out by the change of season and/or Saudi Arabia. Either way, we are sitting on decent gas prices right now, and things should remain that way for the next few months. I expect gas prices to stay similar (if not get lower) until around spring time when temperatures get warmer and people start travelling again. This prediction could drastically change if we, or our allies, choose to take action against Saudi Arabia over the Jamal Khashoggi situation. If we start losing oil supply from Saudi Arabia we should expect gas price increases.