Government policy cannot meaningfully relieve the price increases in the short term, besides an additional release of oil from the strategic reserve or a gas tax holiday, each of which would likely reduce just a fraction of the cost, experts told ABC News.
But steps taken now could help foster decreases over the long term and insulate the market from future disruptions, they added.
The release of oil from the U.S. SPR is offering slight relief for the rise in the price of gasoline, some experts told ABC News."The price of oil would be even higher without those stockpiles being used," said Pavel Molchanov, a senior energy analyst at Raymond James. Glickman, the energy analyst at CFRA, said the move from Biden is unlikely to increase supply and lower gas prices, since the domestic industry is already operating at as high as 96% capacity. The refineries cannot add capacity in a short period of time, Glickman added.
One approach to incentivizing an increase in U.S. production includes a potential tax on oil company profits. But such a move wouldn't remove the impediments to greater oil production capacity, Glickman said. U.S. oil production increased throughout the years of the Trump administration until a sharp, pandemic-induced drop that began in 2020, according to EIA data.
Overall, increased U.S. oil production would help reduce gas prices over the next five or 10 years, and protect the industry from future supply shocks, the experts said. However, some experts noted that the sector's reluctance to aggressively expand production owes to fiscal discipline imposed by shareholders as well as the continued rise of renewable energy."We know the energy transition is coming at some point," said Glickman, the CFRA analyst.
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