Governmental policy toward any enterprise can and will, to some extent, make that enterprise either a "winner" or a "loser". Maybe not in totality, but will most certainly enhance or retard the activity of said enterprise. Oil production is no exception. When we drill for and produce more product, the price goes down. When we shut off or down production of the same product, prices rise. Economics 101, supply and demand and all of that....certainly. BUT...aided and/or discouraged by government policy absolutely has it's effect. Recent history is validation of this. To deny the government's role in choosing losers and winners among businesses is naive at best, and nearly criminally irresponsible at worst. We must accept what is evident, whether we like it or not. At this point, solutions may be sought. But, recognition of an issue (read, problem) is the only way to begin to solve the issue.
Yes, both forces are at work, but one is artificial and could even be considered "evil" in the sense that it works to stifle one activity in favor of another. If we truly wish to rely on market forces (capitalism, what sells the best, wins) then a government really has no business controlling the activity of it's citizens. The evidence of what that leads to is all around us and riddled all throughout history. Look up and see.
Now, some would argue that government involvement (interference) has it's positive consequences and that is certainly a worthy discussion, but at present the over reach of government has become excessive and is causing harm. Exacerbated by shut downs, naturally occurring, shortages, and the forces associated with pandemic. But all in all governments have been on the wrong side of most of what has happened in the past couple of years. They have been working to restrict peoples activities rather than enhance and encourage activities that might have brought positive solutions to some of the problems we've faced lately. Again, history is rife with examples of (certainly western civilization) discovering remarkable answers in the face of terrible odds. But, government is monolithic and essentially lives in fear and whether we like it or not makes most of it's decisions based on those same fears.
Oh, and when it was stated that "the price of oil isn't set by local politicians".....that is absolutely true. But see the above to understand the role that politicians (ie. the government) have in influencing prices and supply. Their hands are not clean, so to speak and just because they do not "set" the prices, does not mean that they exert no influence which absolutely has it's effect.
The argument and logic are faulty. It fails to include some pertinent information surrounding the discussion.