Oil and gasoline prices are often impactful in elections. For example, high oil prices helped tank President Jimmy Carter’s chances at a second term in 1980. Just last month, the price of WTI, the U.S. benchmark for oil, actually went negative. Today, it is trading in the mid-$30s, which is low compared to most of the last two decades. This isn’t good news for oil producers in the United States. On the other hand, gasoline prices are low—under $2.00 per gallon across much of the country—which will help American consumers and businesses as we struggle to recover from the pandemic-induced recession.
Here is how the current oil situation may impact the upcoming presidential election—now less than six months away.
In President Trump’s Favor:
- Low gasoline prices help American consumers. It costs less to drive and this may encourage Americans to take the roads more this summer, despite economic troubles and fears of the virus.
- Low oil prices provide airlines with a better opportunity to profit, despite depressed travel conditions. Cheaper jet fuel lowers a major cost for airlines.
- 25% of crude oil in the United States is used for industrial purposes. Cheap crude oil helps a variety of industries lower costs as they struggle to get back on track.
- Cheap oil disincentivizes consumers to support energy policies that President Trump derides, such as the Green New Deal and other major changes in our energy and fuel landscape.
In Vice-President Biden’s Favor:
- Low oil prices have been devastating for jobs in oil producing regions in the United States. People have been laid off from jobs in drilling, marketing, sales, technology, office management and more. By the beginning of April, seven oil companies, eight oil-field services companies and two pipeline companies had already filed for bankruptcy and there are more coming. These job losses hit particularly hard in states that Trump is expected to win (Texas, Wyoming, North Dakota) and in swing states (like Pennsylvania) that he likely needs to win again. Biden can seek to turn these job losses and ensuing financial distress in the oil patch to his advantage in November.
Source: Forbes Business