State Department energy adviser predicts gas prices will fall to about $4 a gallon

Brady Knox

July 18, 02:04 PM July 18, 02:04 PM

A senior State Department adviser for energy security claims gas prices are expected to fall to roughly $4 a gallon.

The estimate follows data from the American Automobile Association showing the United States has seen a marked decrease in gas prices since last month, a turnaround from months of skyrocketing increases. The price of gas was $4.67 per gallon as of July 11 despite growing demand, a trend State Department adviser Amos Hochstein believes will continue.

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"I expect [the national average gas price] to come down more toward $4, and we already have many gas stations around the country that are below $4," Hochstein said on CBS's Face the Nation. "This is the fastest decline rate that we've seen against a major increase of oil prices during a war in Europe, where one of the parties in the war is the third-largest producer in the world. So these are extraordinary circumstances."

Hochstein's optimism regarding falling gas prices is not shared by some in the private sector, with JPMorgan analysts warning earlier this month that countersanctions from Russia could result in a "stratospheric" climb in global oil prices, according to Bloomberg. Moscow is in a "robust" fiscal situation, allowing the country to slash daily crude oil production by 5 million barrels without inflicting major economic damage, the economists wrote, noting a 5-million-barrel-per-day cut could triple global oil prices.

"The tightness of the global oil market is on Russia’s side," they wrote.

The next round of sanctions, set to take effect Dec. 5, alone is estimated to increase gas prices up to 50% over what they are now, according to an internal analysis from the U.S. Treasury. The anticipation of those sanctions would be felt at the pump over a month before, experts say.

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Analysts are likewise skeptical of the Biden administration's plan to cushion the effects of sanctions on gas prices, with security scholar Edward Chow calling the International Energy Agency's March release of a 10-point plan to cut back on demand for oil "puzzling."

"I have not met a single person who has worked in the energy industry who believes this can work," he told the Washington Post.