At the end of April this year, President Trump completed his first 100 days as the 47^th President.  Among President Trump’s early economic objectives was reducing U.S. energy prices to combat inflation and ease consumer burdens. During his first 100 days this term, oil prices declined nearly 20%.

To put this in context, we reviewed how oil prices trended during the first 100 days of the current administration, as well as the five previous ones.

Source: EIA

In the chart above, the WTI oil price on the first day of each President’s administration serves as the starting point with a relative price level of 100%, then future prices are expressed as a percentage of that starting price.

The key takeaways from this chart are two-fold:

• During the last six administrations reviewed, oil prices increased under Democratic leadership, while prices decreased under Republican leaders, most likely due to changes in the regulatory environment for oil and gas exploration.
• Under President Trump, oil prices declined more than in his first term and more than they did under former President George W. Bush.

What factors caused this significant decrease in oil prices over Trump’s first 100 days in office? 

1. Deregulation and Domestic Production Surge

The Trump administration has prioritized “unleashing American energy” through sweeping deregulation. Executive Order 13990 and related climate policies from the previous administration were revoked, lifting restrictions on oil and gas exploration on federal lands, including Alaska’s Arctic National Wildlife Refuge and offshore drilling permits.¹ These moves aimed to accelerate domestic production, with a focus on shale, LNG exports, and critical minerals.

• Impact on Supply: The U.S. is already the world’s largest oil producer (averaging 12.9 million barrels/day² in 2023), but streamlined permitting and reduced regulatory hurdles could further boost output.
• Consumer Prices: Increased supply typically exerts downward pressure on prices. However, global market dynamics (e.g., OPEC+ production cuts) and geopolitical risks (Middle East tensions, Russia-Ukraine war) could offset domestic gains, keeping prices volatile.

2. Trade Policies and Tariffs: A Double-Edged Sword

The Trump Administration’s baseline tariff on imports and higher reciprocal tariffs on trade-deficit partners (e.g., China, EU) aim to protect U.S. industries but risk escalating trade wars if negotiations with trading partners are unsuccessful.

• Oil Market Implications: Tariffs on Canadian heavy crude could disrupt refinery operations optimized for such inputs, potentially raising short-term gasoline prices.³ This could raise input costs, potentially increasing gasoline prices in the short term.
• Global Demand Concerns: The Energy Information Administration (EIA) recently slashed its 2025 global oil demand growth forecast by 400,000 barrels/day, citing economic uncertainty from tariffs.⁴ Lower demand could suppress prices but also dampen investor confidence in production growth.

3. Renewable Energy Rollbacks and Fossil Fuel Focus

The Trump Administration also halted federal support for renewables, including freezing wind/solar subsidies and terminating the EV mandate, signaling a shift toward fossil fuels.⁵

• Gasoline Demand: Rolling back EV targets may sustain gasoline consumption, supporting refinery margins.
• Ethanol Expansion: A recent emergency waiver allows summer sales of E15 ethanol-blended gasoline, resulting in lower pump prices and benefiting corn farmers. While this provides short-term relief, it underscores reliance on biofuels amid stalled climate policies.⁶

4. Geopolitical Risks and Energy Security

The Trump Administration’s “peace through strength” approach includes leveraging energy exports as a geopolitical tool. Sanctions on Iran and Venezuela, coupled with pressure on Russia, could tighten global supply — potentially offsetting lower prices from U.S. production gains.

• LNG Exports: Expedited LNG project approvals position the U.S. to replace Russian gas in Europe.⁷ Higher exports could raise domestic natural gas prices, indirectly affecting electricity and manufacturing costs.
• Stockpiling Strategy: Plans to replenish the Strategic Petroleum Reserve (SPR)⁸ could also stabilize prices during supply disruptions but may also signal market uncertainty.

5. Consumer Outlook: Short-Term Relief vs. Long-Term Risks

While deregulation and ethanol policies may lower fuel costs temporarily, structural challenges remain:

• Refinery Bottlenecks: Aging U.S. refineries (no new facilities since 1982) struggle to process light shale oil, necessitating continued heavy crude imports.⁹
• Inflationary Pressures: Newly implemented tariffs could increase transportation and manufacturing costs for US manufacturers, negating savings from cheaper crude. 

During President Trump’s first 100 days in office, U.S. oil prices declined about 18%, the largest decline observed during the last six Presidential administrations. Executive orders signed are designed to reduce regulations for U.S producers and may set the stage for a resurgence in U.S. oil production. However, consumers may not see sustained price relief due to global market factors and policy risks.

WTI Strip Prices Decrease in the Short Term

Spot prices and futures prices for the West Texas Intermediate (WTI) contract decreased approximately $1.25 per barrel in the near term and increased approximately $0.75 over the longer term.

WTI Strip Prices — One Month Change

As shown, the oil price curve is shifting to a state of “contango,” reflecting the market’s expectation of higher future spot prices over the longer term.

Oil Price Outlook

The price distribution below shows the crude oil spot price on May 7, 2025, as well as the predicted crude oil prices based on options and futures markets. Light blue lines are within one standard deviation (σ) of the mean, and dark blue lines are within two standard deviations.

WTI Crude Oil $/BBL

Based on these current prices, the markets indicate there is a 68% chance oil prices will range from $46.50 and $70.00 per barrel in mid-August 2025. Likewise, there is roughly a 95% chance that prices will be between $31.50 and $103.00. By mid-October 2025, the one-standard deviation (1σ) price range is $45.00 to $72.50 per barrel, and the two-standard deviation (2σ) range is $28.50 to $109.00 per barrel.

Insights

Remember that while option prices and models reflect expected probabilities rather than certain outcomes, they remain a useful tool for assessing market expectations and risk. Throughout most of 2023 and 2024, crude oil spot prices generally fluctuated within the range of $70 to $90 per barrel. During that period, we observed general increases in futures price volatilities as prices approached the upper and lower bounds of that range. As of May 7, 2025, crude oil spot prices have decreased below that range, declining sharply to levels not seen since early 2021. For mid-October 2025 pricing as of May 7, 2025, the 1σ range had a spread of $27.50 per barrel, and the 2σ range had a spread of $80.50 per barrel. While these spreads are relatively similar to those observed in prior months, the decline in futures prices has required a higher volatility to sustain these similar dollar-based spreads.