Trump has only one real option to slash gas prices

Trump’s Energy Dilemma: A Critical Moment for Fuel Prices

Trump has only one real option – The ongoing energy crisis has created a financial burden for everyday Americans and a political challenge for the White House. With inflation climbing and real wages stagnating, voters are increasingly pointing fingers at President Donald Trump for the steep cost of fuel. Gasoline prices have surged to $4.50 per gallon, prompting urgent calls for action to prevent them from breaking previous records set during the Biden administration. Despite this, Trump has already initiated emergency measures aimed at mitigating the crisis, but analysts argue that these efforts may not be enough to reverse the trend.

The Strait of Hormuz: The Ultimate Lever

According to Jan Stuart, a global energy strategist at Piper Sandler, the administration’s options are limited. “There’s precious little the administration can do,” Stuart remarked, emphasizing that the key to alleviating the situation lies in reopening the Strait of Hormuz. This narrow waterway, strategically vital for global oil shipments, has been a focal point of geopolitical tensions, and its closure has disrupted supply chains, driving prices higher. While Trump has implemented measures such as easing sanctions on Russia and Venezuela and waiving shipping restrictions, these actions are seen as temporary fixes. The real solution, according to experts, remains the restoration of oil flow through the strait, regardless of the method used.

“President Trump has always been clear that these are short-term, temporary disruptions. The President brought oil and gas prices down to multi-year lows at record speed, and as traffic in the Strait of Hormuz normalizes, these energy prices will plummet once again,” said White House spokeswoman Taylor Rogers in a statement.

However, the situation is expected to worsen. Stuart anticipates gas prices reaching $5 per gallon by this month, with Brent crude futures projected to average $130 per barrel in the coming quarter—a new record. This forecast underscores the urgency of addressing the immediate crisis, as prolonged disruptions could have long-term economic repercussions.

A Tax Holiday: A Short-Lived Relief?

Among the proposed solutions, suspending the federal gas tax has emerged as a potential quick fix. Trump recently endorsed this idea, highlighting its appeal as a straightforward way to reduce consumer costs. Yet, a closer examination reveals its limitations. According to the Penn Wharton Budget Model, a nonpartisan think tank, a gas tax holiday covering the summer driving season would cost the Highway Trust Fund $11.5 billion in lost revenue. While consumers might see some relief, the impact is minimal, with a weekly fill-up of a 15-gallon tank saving only $35 during the tax pause.

“It’s exactly the opposite of what’s needed,” noted Jason Bordoff, founding director of Columbia University’s Center on Global Energy Policy. “A gas tax holiday would boost fuel demand at a time of low supply, creating more pressure on already strained markets.”

Historically, gas tax holidays have been criticized as political gimmicks. House Republicans dismissed the idea in 2022, calling it a short-term maneuver. Similarly, then-candidate Barack Obama had criticized the practice in 2008 after both Hillary Clinton and John McCain supported a temporary suspension. Mark Zandi, Obama’s former economic adviser and now a chief economist at Moody’s Analytics, echoed this sentiment, stating, “He was right. It is a gimmick.”

The Nuclear Option: Export Bans and Market Volatility

Some lawmakers have suggested a more drastic measure: restricting or banning U.S. exports of crude oil, gasoline, and other petroleum products. This strategy could temporarily lower domestic prices by reducing supply overseas, but experts warn of its unintended consequences. While a ban might provide immediate relief, it could lead to a rapid decline in production as refiners adjust to lower demand, potentially destabilizing global markets.

Texas oil companies, in particular, could suffer significant losses if exports are cut, as the state is a major hub for refining and shipping. Additionally, world oil prices might skyrocket, creating a ripple effect across the global economy. Despite the potential for a quick fix, the move is seen as risky, with analysts questioning its long-term viability.

Meanwhile, U.S. oil production has not seen the anticipated surge since Trump took office. Preliminary estimates from the Energy Information Administration (EIA) indicate that crude output reached 13.7 million barrels per day last week, only slightly below the 13.8 million barrels recorded at the end of 2025. The EIA projects flat production this year, with a modest increase to 14.1 million barrels per day by next year. This stagnation highlights the challenges in expanding domestic supply to counterbalance external disruptions.

Saudi Arabia’s Role in the Price Equation

Historically, the White House has relied on Saudi Arabia to stabilize energy markets. As the leader of OPEC, Saudi Arabia holds the power to adjust production levels swiftly, influencing global supply and demand. In the past, officials have called on Riyadh to increase output, providing a buffer against price spikes. However, this approach is no longer an option, as the Strait of Hormuz crisis has shifted the focus to immediate action rather than diplomatic leverage.

Bob McNally, founder of Rapidan Energy Group and a former energy adviser to George W. Bush, recalled the effectiveness of this strategy. “The most effective tool in the past was the telephone—calling Saudi Arabia and asking them to open the taps,” he said, underscoring the importance of coordination with the Gulf nation. With the strait’s closure, the U.S. is left with fewer diplomatic tools, forcing a more direct intervention to restore balance to the market.

As the situation unfolds, the pressure on Trump to act intensifies. The administration must navigate a complex web of economic, political, and strategic considerations to bring prices down. Whether through reopening the Strait of Hormuz, adjusting tax policies, or shifting production strategies, the path forward is fraught with challenges. The coming weeks will determine whether these efforts can stabilize the market or if the energy crisis will continue to escalate, reshaping the economic landscape for months to come.