On Friday, April 26, President Donald Trump told reporters that he “called up” OPEC and told them to bring down fuel costs.
“The gasoline prices are coming down. I called up OPEC. I said, ‘You’ve got to bring them down. You’ve got to bring them down,’ and gasoline’s coming down,” Trump said to reporters as he headed to an NRA event in Indianapolis.
Shortly after Trump’s statement, U.S. West Texas Intermediate crude futures plunged by four percent to $62.80 per barrel, and international benchmark Brent Crude fell by three percent, to $72.15 per barrel.
According to the Wall Street Journal, sources familiar with the matter said that Trump neither spoke to the Saudi crown prince, the energy minister nor OPEC’s secretary general. It’s still not clear who Trump claims to have spoken to at OPEC.
Trump also mistakenly said that gasoline prices are decreasing, when in fact they are 10 percent higher compared to a week ago. Wholesale gasoline prices surged almost 40 percent since the beginning of the year, following the increase in crude oil prices.
Trump has ramped up his attack on OPEC and its members as oil prices hit a five-month high. Trump’s hope to decrease gasoline prices contradicts his geopolitical decisions, such as sanctions against Iran and Venezuela causing lack of oil on the global market.
Regardless, the laws of supply and demand—which is familiar to grad school students —, tell us that a low supply for a resource leads to a high demand, which inevitably causes the price to increase.