By Dean Baker
For better or worse (worse in my view), President Biden has not done much to restrict drilling for new oil and gas. As a result, we are now producing more than when Donald Trump was in the White House. Nonetheless, there are still many people who want to blame Biden’s restrictions for the high price of oil.
Well, none of these claims make any sense. Biden has not done much to restrict the price of oil, we are producing more oil now than under Trump, and oil is not expensive. To see the last point, I adjusted the price of oil (West Texas Intermediate) for the inflation we have seen since 2000, using the GDP deflator.
As can be seen, oil prices were somewhat lower at times in the last twenty-three years. They were lower at the start of the George W. Bush administration, but higher through most of his second term. The plunged in the Great Recession, but then were higher than the current level through the rest of President Obama’s first term.
Oil prices then fell sharply towards the end of the Obama administration, as a flood of fracked oil came on line. Oil prices then rise under Trump, passing the current level in 2018 and then falling again in 2019. Oil prices plunged with the pandemic shutdown, but then soared with the reopening and the Russian invasion of Ukraine.
They have now fallen back to a level that is below where they have been for most of the first two decades of this century. In spite of the widespread whining of Republican politicians about high oil prices, they are actually lower now than in most of the period that George W. Bush was in the White House.
This first appeared on Dean Baker’s Beat the Press blog.