Donald Trump wants to lower oil prices Will petrol and diesel soon be cheaper?

Donald Trump wants to extract more oil and gas in order to lower the oil price and boost the US economy. Is this feasible? And if so, will fuel prices also fall?

Donald Trump wants to significantly reduce the price of oil in order to boost the economy. The US President's trade advisor, Peter Navarro, gave specific figures in an interview with the US news channel "Fox News" recently. According to him, a price of less than USD 50 for a barrel of crude oil (159 liters) would be enough to reduce inflation by at least one percentage point. How would this development affect car drivers in Switzerland? And are Trump's plans even realistic?

The price of a barrel of US WTI (West Texas Intermediate) crude oil is currently 68 dollars. So it would still be a long way to 50 dollars. Should Trump nevertheless achieve his goal, what impact would this have on the price of petrol and diesel? And when would the effects be felt? ZKB investment strategist Simon Lustenberger dampens expectations: "Downward price adjustments happen more hesitantly than upward ones," he tells "20 Minuten".

How much would petrol and diesel cost?

But regardless of the timing: to what level would petrol and diesel prices fall if Trump were to achieve his goal? Erich Schwizer, automotive engineer at the Touring Club Suisse (TCS) mobility club, estimates that at 50 dollars for a barrel of WTI crude oil, the cost of unleaded 95 petrol would settle at an average of 1.65 francs per liter. According to TCS, a liter of petrol of this grade currently costs around 1.72 francs. Under this scenario, diesel would fall from the current 1.84 francs to 1.75 francs.

That would be good news for consumers, but are Trump's plans feasible? As one of his first acts in office, the US President issued a decree allowing oil and gas drilling in the USA to be extended to coastal waters. However, it is not just the USA that is in the boat of oil producers and oil price drivers. There are also the countries that belong to the Organization of the Petroleum Exporting Countries (OPEC), above all Saudi Arabia. And they have been difficult to negotiate with - despite Trump's announcement at the World Economic Forum in Davos in January that he wanted to ask the OPEC countries to lower the cost of oil.

Obstacles in the way

ZKB expert Lustenberger shares this view and points to Saudi Arabia as an obstacle. The country needs a price of 85 dollars per barrel of oil this year in order to achieve a balanced budget with its revenues. What's more, Russia's oil industry is also opposed to Trump's plans. The production costs for a barrel of oil there are far lower than in the USA, at an average of 15 dollars according to the Center for Research on Energy and Clean Air. "An oil price of 50 dollars," says Lustenberger, "would not cover costs for many producers in the USA."