Think public policy controls gas prices? Think again. Oil producers aren’t waiting on Washington—they’re making decisions based on profits, not politics.

There is little incentive for more than a modest increase in oil production.

U.S. oil producers are prioritizing capital discipline and shareholder returns over aggressive expansion.

The demand for oil and natural gas is not that sensitive to price changes in the short term (less than five years). Increasing supply doesn’t significantly increase demand—it just forces producers to sell at lower prices.

However, today’s oil producers are more disciplined than in past boom-and-bust cycles. Rather than engaging in a race to the bottom, they are likely to match supply to demand. They will strive to keep prices stable at a profitable level.

There will still be fluctuations, but those fluctuations are driven by competition rather than uncontrolled oversupply.

Significant price movements are brought about by events largely outside the control of the U.S. government or U.S. producers.

For example, Trump boasts that gasoline prices were lower at the end of his administration compared to those during President Joe Biden’s tenure.

What he fails to mention is that in 2020, after failing to agree on production cuts with Russia, Saudi Arabia flooded the market with oil and prices dropped to historic lows.

He also fails to mention that COVID significantly decreased demand.

So, prices fell as a result of oversupply and decreased demand, not as a result of government policy.

Historically, large price movements in gasoline resulted from recessions and economic expansion cycles, Gulf hurricanes, and wars.

U.S. shale oil, which entered the market in 2014, stabilized oil prices at a lower level and reduced the influence of OPEC.

But shale oil production was the result of private companies making profit-maximizing decisions.

U.S. policy positively affected growth by lifting the crude oil export ban in 2015 during President Obama’s tenure.

Ultimately, oil production decisions in the U.S. are driven by market forces—not regulation or the availability of leases.

Regulations matter, but they are not the main constraint.

Opening up new areas to drilling will have minimal impact on supply. The Arctic National Wildlife Refuge would not be profitable at current prices and would take 8-12 years to bring online. Gulf oil leases, though likely profitable, would still take 5-10 years to bring online.

Oil producers operate with high uncertainty regarding demand, the regulatory environment, and prices.

Long-term decisions, like drilling in the arctic or deep water, entail significant risk.

In comparison, shale wells are fast—3-12 months from permitting to production.

Streamlining permitting on federal lands wouldn’t necessarily increase total U.S. oil production, but it could shift where production happens.

That shift would take income away from private landowners and reduce direct state revenues in oil-producing states like Colorado, New Mexico, and Wyoming, as more money flows to the federal government instead.

This kind of policy feels exploitative, as it takes revenue from private landowners and oil-producing states and redirects it to Washington.

The U.S. oil industry is driven by market forces, not government policy.

The best way to ensure stable prices and production isn’t opening more federal land—it’s maintaining a predictable regulatory environment, supporting infrastructure, and letting market incentives do their job.

Sure, we want oil companies to operate within reasonable guardrails, but beyond that, there’s little the government can do to control production or prices.

And that’s the reality of how market-driven economies work.