Trump Promised to “Drill, Baby, Drill.” Big Oil Won’t Let Him.

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The promise was simple. All those pesky regulations, limitations, and outright bans that were imposed on fossil fuel companies would be lifted by the mighty pen of President Donald Trump, allowing them to finally produce as much as they materially could — environment be damned — and, by virtue of increased supply, bring the price down to guarantee cheap gasoline for all Americans.

In theory, it was a sound proposal. As oil demand falters in several large markets, most important of all China, and new streams of production came from the Americas, an oil glut was expected for 2025, bringing prices down, perhaps below $70 for the first time since the pandemic. Add to that the unleashing of the US’s oil giants and prices could’ve fallen to levels not seen since the pandemic, or, prior to that, since the price war launched by the Saudis in 2014. But it seems the realities on the ground were far different from what Trump expected, and his promises of “unleashing America’s energy” will not go too far … and the fault lies within Big Oil.

Realities on the ground

Several oil and oil-adjacent outlets have been claiming that, despite Trump’s hopes, the US’s oil & gas sector is showing impressive restraint, with companies focusing on consolidating their production, improving their cost structure, and returning money to investors. “Drill, baby, drill” seems to have been the motto for the 2010s, but in the 2020s the industry has consolidated, the most accessible fields seem to already be depleted, and the companies that still operate have learned the painful lessons from the price wars of the 2010s. As a result, oil production, which grew in the US by nearly a million barrels a day in 2024, is expected to grow by a mere 300,000 in 2025.

The message that oil executives have been presenting is clear: “we will drill more … if the price is right.” But the price is not right, and oil prices would need to reach $80 or more, it seems, before the US’s energy giants decided it’s time to start reinvesting their significant profits into extracting more oil.

As a note, if the prices do get that high and the US’s oil is “unleashed,” it would be a pyrrhic victory for Trump, as this would mean high gasoline prices, defeating the purpose of his policies.

The most quoted reason is capital restraint: companies do not want to overextend and find themselves in a vulnerable position should prices go lower. But the high costs of shale seem to play a large part, pointing to a possibility already presented by Michael Barnard, which is that the extraction costs are so high — since the cheapest fields have been depleted — as to threaten the entire industry should demand growth cease. And if you’ve read my previous articles, you’ll know I believe that’s exactly what will happen.

Trump’s remaining options

We’re less than a month into Trump’s presidency, so things could change, but the position of oil executives seems to be solid and widespread throughout the industry — as an oil magazine put it, “the baby does not feel like drilling.”

This does not mean Trump is yet to fail on his promise of cheap gasoline. A cluster of factors could bring lower oil prices, including China’s and Europe’s demand surprising to the low side (something I believe likely); Guyana’s, Brazil’s and Argentina’s production rising faster than expected (something I believe unlikely); Trump messing up massively and causing a recession to the point oil consumption is severely affected (something sadly possible); and most dramatic of all, Trump convincing Prince Mohammed Bin Salman through arguments or force (probably force) to launch yet another price war (something unthinkable a month ago yet somehow realistic today).

For now, the market seems to be confident in a relative abundance of oil, with Russia’s and Iran’s sanctions barely making a blip on the price of oil, despite potentially withdrawing as much as 2 million barrels a day from the market. Prices remain around 70-something dollars per barrel, and the fact that production won’t (or can’t) easily rise to bring them down is a silver lining for our planet, as it makes fossil fuel energy more expensive, further promoting the transition to clean energies all over the World.

Trump wanted to “Unleash American Energy,” but it seems that even if he succeeds in bringing down gasoline prices, he’ll only manage to make the US hopelessly dependent on Middle East oil yet again, choosing to go the way of the dinosaur instead of embracing the cluster of renewable industries left by his predecessor. Hopefully, US states will be able to resist his call and maintain a strong US renewables industry to cover the windfall when his plans inevitably backfire.