How low oil prices turned Trump’s call to ‘drill, baby, drill’ into a pipe dream

When President Donald Trump took office, he promised to “release American energy” – and quickly left no doubt that he meant fossil energy in particular.

During the months that followed, he opened large expanses of public land and American oceans for drilling and reduces the fees that companies must pay for the extraction of oil and gas in these areas. Its administration also proposed to remove environmental rules forcing polluters to report their emissions to EPA, to soften the regulations for the elimination of wastewater from oil and gas and the rewriting of the rules to weaken risk management protocols in refineries. And by declaring a national energy emergency, Trump paved the way for a faster license mainly for fossil fuel infrastructures, lowering exam times from several years to a few weeks. Trump’s signature legislation, the only magnificent act, discreetly included billions of dollars in new federal tax alternatives available for fossil fuel companies. More substantially, it has considerably reduced federal support to wind and solar energy, as well as to electric vehicles – effectively bringing new technologies into competition with petroleum and gas interests.

But Boom’s time that Trump has promised us that fossil fuel producers have not materialized. In fact, the industry is directed in the opposite direction: in recent months, Chevron has declared that he would reduce up to a fifth of his workforce, Conocophillips has announced his intention to drop up to a quarter of his workforce by the end of the year, and Halliburton began his own layoff series. Across the sector, companies have also reintegrated expenses, reducing capital expenditure, break or cancellation of major projects and reducing the number of platforms.

“We believe that we are at a tilting point for the production of American oil at the current prices of raw materials,” said Travis Sice, CEO of Diamondback Energy, an oil and gas company based in Texas in May. “The prices of today, volatility and macroeconomic uncertainty have put [the industry’s] progress in danger. »»

Since the inauguration of Trump in January, crude oil prices have dropped by almost 20%. It is prices left below the level of around $ 65 per barrel where most American producers can expect to break even on drilling, and they reduce these non -profitable extraction conditions which last in 2026. Indeed, the energy agency on energy projects that oil prices, which are currently at around $ 62 per barrel, will drop to $ 51 per barrel next year.

This reflects the composition of the global oil market, on which President Trump has much less control over the national regulations he attacked. In Saudi Arabia, for example, where drilling costs are among the lowest in the world, a barrel of oil costs at most $ 10 to extract. Thus, when the world price of oil drops, as this year, American producers feel compression – but the national oil companies of the organization of oil exporting or OPEC countries continue to be profitable.

Thus, even if President Trump has called for more drilling to reduce the interior prices of petrol, American companies see few reasons to pump more oil when prices are below the profitability threshold. The result reveals a paradox in the prosecution by the administration of what he calls “energy domination”: it wants both lower prices and more drilling, but the first discourage automatically.

“The objective of the domination of energy may not be entirely aligned with the objective of the low oil prices without significant innovation,” said Susan Bell, main vice-president of Rystad Energy, an independent research company, in a press release sent by email. “The increase in American production in a world which is surplus with short -term oil would certainly lower prices, which ultimately makes invest in the non -profitable sector.”

This disconnection was fully exposed this year. Even if Trump has promised boom times for the petroleum and gas industry, he called on OPEC to increase production as a means of keeping its promise to reduce petrol prices for Americans. In a January speech, he told OPEC to “lower the price of oil” and in March, he said that it was “very important that OPEC increases the flow of oil” in an article on social networks on X, the platform formerly known as Twitter.

The following month, OPEC announced that it would increase production at a time when oil prices were already a four -year hollow, taking industry analysts by surprise. Although this decision may have been an attempt to appease Trump, it was also an opportunity to assert domination over American companies and increase the cartel’s market share. The increase in production also acts as a stamp against price volatility by creating an excess offer which can be exploited in times of crisis. There has not been a shortage of the latter in recent years, with an climbing of conflicts in the Middle East and the Russian-Ukraine war in progress.

“All this additional supply creates a cushion,” said Trey Cowan, petroleum and gas analyst at the Institute of Energy Economy and Financial Analysis, which follows the rise of renewable energies and its impact on fossil fuels. “Events like the hunting of the inhabitants of Qatar by Israel – normally, it would be a crisis situation. Oil prices would increase enormously. And even if they increased, they returned right away. ”

Trump’s prices also did not help the American fossil fuels industry. Its supplements on steel and aluminum, two metals used omnipresent in oil and gas infrastructure, increased the cost of production. “The cost of our biggest drilling entry cost, the case has increased by more than 10% in the last quarter due to steel prices,” said STICE, CEO of Diamondback Energy, noted in his letter to the shareholders.

Cowan said that oil prices increase and decrease periodically, the industry is faced with a very volatile market at a time when petrol demand is about to take the growing adoption of electric vehicles. In its desire to find new markets, industry has invested massively in refineries producing plastics. But there too, the industry is now faced with excess and thin beneficiary margins.

“You lack places to use the oil, so you create an excess condition that will continue for a longer period,” said Cowan. “We expect oil prices to be lower for an extended period.”

This story was initially published by Grist with the title of how low oil prices transformed Trump’s call to “drill, baby, unravel” into a pipe dream on Sept. 16, 2025.