The New Energy Policy

On September 24, 2024, Cogport.com proposed that the U.S. support Open Policies for drilling and exploration of oil and natural gas in the U.S. 

Cogport proposed a target price of $60/Barrel for WTI Crude Oil.

The history of Global Crude Oil Prices has been one of high volatility.

Until the early 1970’s, the U.S. was the world leader in Oil production.

This dominance was lost to OPEC (Middle East Oil) who developed their abundant resources and took control of the market.

In 1973 OPEC imposed an Oil Embargo on the U.S. which resulted in a quadrupling of prices with significant inflation and recession in the U.S. Economy (Stagflation).

U.S. energy policy has been inconsistent.  We have ranged from demands for taxes on “Windfall Profits” to neglect when hard times led U.S. Oil Producers to reduce U.S. capacity and move production off-shore.

A lack of Strategic Thinking on the part of our Government.

The volatility in Oil Price has played havoc with the ability of Businesses to plan costs and Consumers who live on a limited budget.

Here is modern history of the Range of Prices:

1998  (Asian Financial Crisis)                                                        $  11/Barrel

2008  (Rising Demand and Geopolitical Tension)                 $ 147/Barrel

This makes no sense for a basic commodity.

More recent history of the Range of Prices:

2018 (Trump)     $  64/Barrel

2022 (Biden)      $ 139/Barrel (Peak)

The recent price increase was driven by policy restrictions on Supply, not Economic Demand or Geopolitics. 

A huge factor in the Inflation Rate under the Biden Administration which peaked at 9%.

The New Administration started in January by cutting Regulation and opening the Supply Chain.

Today, WTI Crude has fallen to $66/Barrel.

Continuation of new drilling, exploration and support infrastructure will continue to grow Supply, and maintain or reduce prices.

Lower Energy Prices are a benefit to Consumers at all levels, especially low and middle income wage workers.

It combats inflation rates and should be considered by the Federal Reserve in its current interest rate policy.  So far Chairman Powell is resistant due to an unfounded fear over tariffs.  He is stuck in an outdated paradigm.

SUMMARY

The Trump administration has embarked on policy that could support stable global prices for Oil and Natural Gas.

They have established good alliances with Middle East countries.

Russia still has a large role in Global Supply.  Sanctions against them could cause some disruption and price impact for a period of time.

However, the outlook for a stable market in Oil prices has a good start.

For reference, the chart below shows the annual average price of Crude Oil since 2010.

You can see the volatility, and the reduction in price in 2025, so far.

David Hollaender                                                          July 28, 2025

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