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Simply put, neither Biden nor President Trump have a secret lever at the Resolute Desk that makes the price of oil go drastically up or down.
The idea of a forthcoming gas price spike is fueled by Trump himself as a piece of his broader criticism of the Democrat's plan for tackling climate change. “If Biden got in, you'd be paying $7, $8, $9,” Trump said the day before Election Day at a rally in Grand Rapids, Mich. “Then they'd say, ‘Get rid of your car.’ ”
As Trump likes to brag, gas prices — currently a little above $2 a gallon nationally — indeed have been down during the last year of his term.
But that's because the coronavirus pandemic has devastated demand for oil as people everywhere fly and drive less often. Although prices recovered a bit over the summer, things got so bad in April that the price per barrel of West Texas Intermediate crude briefly went negative for the first time ever.
Biden wants a “transition” away from oil. But that will have a mixed effect on the petroleum prices.
The former vice president is planning to reorient the government toward cutting greenhouse gas emissions and moving toward cleaner sources of energy.
One way he will do that is through tighter rules on leaks of methane from wells and restrictions on drilling on federal lands. Those new regulations may squeeze oil supply and lift gas prices. “Perhaps in a couple of years, depending on Biden's policy, there could be more an impact than there will be when he takes office,” said Patrick DeHaan, an oil analyst at GasBuddy.com.
But other potential moves by Biden — such as cranking up requirements on automakers to make more fuel-efficient vehicles or boosting incentives to buy electric cars — probably will reduce demand for gasoline and put downward pressure on prices.
Jim Burkhard, head of crude oil research at IHS Markit, said fuel-economy standards are “a very powerful force” in reducing demand. “It doesn't have an impact overnight or in a year, but it has a cumulative impact over time.”
The Biden administration's stance toward Iran could result in incrementally lower gas prices.
The former vice president has said he wants to ease tensions with the U.S. nemesis by potentially returning to a nuclear weapons deal brokered under his old boss, President Barack Obama.
Lifting economic sanctions against the country could have the side effect of uncorking more Middle Eastern crude oil into the world market, potentially reducing prices, Molchanov said.
“But in the grand scheme of things, the impact on the price that drivers see at the pump would be barely measurable: a few pennies per gallon, in either direction,” he added. “All of this pales in comparison to the impact of the pandemic.”
There is one key way Biden can have a pretty big impact on the price at the pump: getting the coronavirus under control.
The wide distribution of an effective vaccine would make people feel safe to return to their normal, energy-consuming routines commuting to work and flying cross-country again.
“Forget the energy transition issues,” Burkhard said. “Containing covid in 2021, if the Biden administration is able to do that successfully — that would boost oil demand, and therefore that would boost oil prices.”
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