Oil prices continue to decline sharply—breaking below $65 per barrel, the lowest point since the pandemic—raising critical questions about the broader impact.
U.S. Energy Secretary Chris Wright recently stated at a press conference in Riyadh that during the Trump administration, average energy prices in the U.S. over four years would remain lower than during the Biden presidency. He emphasized that reducing investment barriers and infrastructure bottlenecks can effectively lower energy supply costs, though he declined to comment on specific pricing targets.
During Biden’s tenure, the U.S. faced repeated friction with Saudi Arabia over its refusal to increase oil production to curb prices. From 2017 to 2021, crude oil averaged approximately $83 per barrel.
Wright noted that the Trump administration aligned more closely with Saudi Arabia in the energy market, sharing a mutual interest in “matching growing global energy demand with increased supply.” However, the current drop in oil prices has raised concerns for Saudi Arabia, where fiscal balance requires a much higher price per barrel. Goldman Sachs has warned that the falling prices could undermine Saudi Arabia’s economic diversification and modernization initiatives.
Additionally, the U.S. and Saudi Arabia are advancing preliminary agreements on civilian nuclear energy cooperation under tight non-proliferation controls. Wright stressed the importance of Saudi Arabia signing a “123 Agreement” with technology transfer clauses and criticized its potential engagement with China on nuclear projects. These developments come as Biden-era negotiations tying nuclear cooperation to defense agreements and Saudi-Israeli relations normalization have stalled amid escalating Israeli-Palestinian conflicts.
While lower oil prices benefit consumers at the pump, the broader implications complicate the narrative:
Wright’s optimistic outlook masks deeper contradictions within the U.S. energy strategy. As “lowering oil prices” and “boosting exports” create conflicting policy goals, the simplistic narrative of “low oil prices driving economic growth” no longer holds water. In a new era where America’s energy role is being redefined, oil price fluctuations reflect not only market supply and demand but also the broader health of the global economy.
