As President-elect Donald Trump embarks on his mission to achieve more affordable fuel prices, he may encounter a few bumps along the way. During an October rally, Trump proclaimed, "Frack, frack, frack and drill, baby, drill." He has expressed his ambition to reduce the current average gas price of $3.07 per gallon to below $2.

Recently, he appointed Chris Wright, the CEO of Denver-based Liberty Energy and a staunch advocate for fracking, as the secretary of energy. Despite the booming American oil industry and the potential for increased output, this does not guarantee a decrease in gas prices. The United States currently produces over 13.4 million barrels of oil daily, with projections indicating a rise to approximately 13.6 million by the end of 2025, according to the US Energy Information Administration (EIA). This record is "unlikely to be broken," as no other nation has approached 13 million barrels per day.

The robust US output has led to a surplus of supplies being exported overseas, with the country exporting quantities of crude oil, refined products, and natural gas liquids on par with those produced by Saudi Arabia or Russia, as reported by S&P Global Commodity Insights in December 2023. The Eurasia Group, a political risk research and consulting firm, suggested in a post-election report that US crude production might rise slightly above 14 million barrels per day by 2025.

Such an increase could potentially lower the average price of a barrel of West Texas Intermediate (WTI), the US oil benchmark, to less than $60. The WTI price has dropped from $72.26 on election day to $67.03 in early trading on Monday. However, if the price falls too low, OPEC might reduce its production to maintain higher prices, or it could continue to pump oil to drive prices down and force some US producers out of the market, as it did during the 2015-2016 price war that led to the bankruptcy of numerous US oil companies.

Trump has boasted about gas prices falling below $2 a gallon during his final year in office, attributing this to the increased production during his first term, while overlooking the fact that production has since surpassed that level. He has pledged to further increase production in his second term, promising that this will lower energy and overall prices. "We're going to drill, baby, drill. That's going to bring down prices of everything," he stated at an August rally. However, the drop in gas prices to less than $2 a gallon and the temporary negative oil prices in 2020 were not due to increased production but rather the pandemic, which saw American drivers ordered to stay home or laid off during a severe recession.

If increased production once again leads to a sharp drop in prices, it could result in economic hardship and reductions in production across the US oil sector, even if prices do not reach negative territory this time. Moreover, even if US energy profits remain strong, this does not necessarily imply a significant increase in production. After oil prices surged in 2022 following Russia's invasion of Ukraine and the subsequent sanctions on Russian oil by Western countries, major oil companies reported record profits. Although they increased oil production, much of their earnings from higher prices were used to repurchase shares and acquire smaller oil companies, rather than investing in increased exploration.

Andy Lipow, president of Lipow Oil Associates, stated in September that it would be challenging to significantly exceed production above 14 million barrels per day, as the most cost-effective and efficient locations have already been drilled. "Yes, production can go higher. But are we going to increase oil production by another 50%? That's probably quite unlikely," Lipow said. Trump's aim to boost US oil production by making fracking more accessible with open drilling permits and expanding fracking areas is unlikely to have a significant impact on demand, which has been slowing globally. The EIA notes that economic growth is one of the primary drivers of oil demand. China's deteriorating economy, combined with global clean energy initiatives, has resulted in reduced demand for oil. According to the latest International Energy Agency's Oil Market report, oil demand in China has contracted for six consecutive months, with the most recent data showing this trend continuing into September.

OPEC+, a coalition of leading oil-producing nations, has even postponed plans to increase production due to concerns about excess supply. It is important to recognize that US oil output is driven by the smarter and more efficient operations of oil companies, not by presidential directives. "It's not like President Biden or any president has a dial in the Oval Office to increase production," said Bob McNally, a former energy official under President George W. Bush.