Trump promised golden mountains for the oil sector. That turns out differently

« The chaos caused by this government is disastrous for the market. ‘Drill Baby, Drill« Is nothing less than a myth and a populist campaignus. »

Was signed: an anonymous boss of an American oil company, in a survey that the central bank from Dallas decreased just under two months ago. In that survey, even more gall was spew on the oil policy of Trump. « The keyword to describe 2025 is » uncertainty « and our shareholders hate uncertainty, » said another anonymous oil boss. A third oil baron suggested that the sector, in the midst of all the misery caused by Trump, had to press the « pause button » but in the development of new fields.

The Dallas Federal Reserve survey is not just a survey. Texas, the state in which Dallas lies, is the heart of the American oil world. Many important oil bosses in the United States participate in the three -month study of the Central Bank. Anonymous, it is true that they dare to express themselves a lot sharper than publicly. The survey therefore serves as a barometer for the actual sentiment in the American oil world. And that sentiment was clearly not good two months after Trumps.

You would expect the opposite under a president who finds oil « fantastic » and who announced on the day of his appointment The red carpet For oil companies to be completely explained again. Trump then came up with a decree, with the roaring head ‘Unleashing American Energy‘, that the oil industry had to’ unleash ‘again. Read: a plan that allows all annoying environmental and climate rules that were in the way to disappear quickly.

Oil bosses are already speculating about the end of the heyday of the American shale oil industry

But nothing less turns out to be the case, sharper every day. The oil companies are so displayed so two months later that the first start to put the word to the word when it comes to the pentation of their production. According to the American bureau Baker Hughes, which provides services to the industry, the number of oil installations on land last week has fallen by 10 pieces, to 553. Compared to a year ago, there are even 26 fewer. Those installations are taken from operation because they are no longer profitable enough.

The twenty largest shale oil companies of the US, with the exception of ExxonMobil and Chevron, have meanwhile reduced their planned investments for 2025, with 1.8 billion dollars, or 3 percent, wrote the British business newspaper Financial Times Recently. « As operators, we of course do not have an influence on the macro-economic situation, but we can determine how we react to it, » Vicki Hollub explained, top woman of Occidental Petroleum. That oil company itself has two in the first quarter of this year rigs Closed.

In the sector, some oil bosses already speculate openly about the impending end of the heyday of the American shale oil industry. Shale oil is oil that is locked up in special layers of stone underground and is extracted by ‘breaking’ that rock with water and chemical agents under high pressure – unlike ‘conventional’ petroleum. Ten or fifteen years ago, the winning of it took a big flight, giving the American oil sector a revival again after years of decline. But now the oil bosses fear that ‘shale revolution’ is also starting to come to an end. « We are currently in supreme state of readiness, » said Clay Gaspar, boss of Devon Energy in Oklahoma City, this month to a group of investors. « Everything is conceivable now. »

Barrage of import duties

Where exactly the problem is? For the most part in measures that Trump has taken on a completely different front, and with a different purpose: namely the barrage of import duties he has announced against just about half the world – and especially against China. With those charges, he wants to tackle unfair Chinese competition in particular, he claims.

Trump considers lower oil prices important for the fight against inflation

But through that route, the American oil (and gas) companies are also hit hard. The extra levies on, for example, steel and aluminum from China lead to (strong) higher prices for important materials that the oil companies use in large quantities. The long pipes that are needed to pump oil, for example, ensure the lion’s share of the costs for a new pit for oil companies. And the price of this has risen by 10 percent in the past quarter alone.

The constant threat of a trade war with China also leads to the oil prices being under pressure. After all, China is the world’s largest oil consumer and if economic growth there slows down (further), the demand for oil also falls. The global oil prices still reached record levels during the energy crisis of 2022. Then they ‘calmed’ something again, to $ 80 per barrel. But since Trump has started waving import duties, they have collapsed considerably further, up to $ 60-65 per barrel. In the survey of the Dallas Central Bank, the oil bosses indicate that they need at least a price of $ 65 to make a profit on new fields. If it is up to Team Trump, oil prices may even fall to 50 dollars per barrel. Trump considers lower oil prices important for the fight against inflation.

On the cost side, Trump therefore causes more and more pain at the oil companies. And on the demand side he creates more and more uncertainties – as if Trump has no idea of ​​economic laws. Analysts from market analysis agency S&P now estimate that US oil production at the current prices at the end of this year has fallen by 1.1 percent, to 13.3 million barrels per day. That would be the first annual shrinkage in ten years – with the exception of the Corona Year 2020, when the global economy collapsed and the demand for oil too.

The problem is exacerbated by the cartel of oil -producing and exhibiting countries and a number of allies who are not officially members but who participate: the so -called OPEC Plus group. This cartel, which the US is not part of, jointly produces almost half of all oil worldwide and has an influence on prices. In recent months it has decided to reduce a number of earlier voluntary production restrictions. And a number of individual members of the cartel, including Saudi Arabia and Russia, are even performing their production step by step. As a result, the market only becomes ‘saturated’.

Last Wednesday the cartel members again met to discuss the production strategy for the future. Nothing was officially decided there. But this Saturday a smaller group of members, including Saudi Arabia, will meet each other and it is expected that concrete action will be announced there. In the form of more production.

Why they do that is not entirely clear-lower prices also touch the OPEC countries themselves. Reuters news agency wrote early this month Based on conversations with ten anonymous sources within the cartel that Opec Plus is after a prize war with the American oil producers, who would see the cartel as a threat to its own position.

« The idea is to create a lot of uncertainty for the plans of other companies, » said one of the sources of Reuters, who, according to the news agency, « was aware of the way of thinking of Saudi Arabia. » The American shale industry has partly formed the basis of partially recapturing the American market share in the global oil market-from 14 percent in 2014 to 20 percent now. While the ‘hard core’ of OPEC in that time lost market share, from 40 percent to 25 percent (with the plus members there is that share again 48 percent). And now Opec would consider the moment appropriate to recover some market share.

But it can also be very good that the most important OPEC member (Saudi Arabia) wants to get a few of the notorious quota offenders (in particular Kazakhstan and Iraq) back in line with the production extensions. OPEC is known as a stronghold within which the members are never completely aligned and in which individual members, to the annoyance of the other, secretly ignore their boots. If they release the limitations as a group, prices will fall even further and that is ultimately to the disadvantage of the quota employees. According to the sources of Reuters, Saudi Arabia would be willing to suffer pain for a while.

Prize war

A prize war has already tried to feed OPEC earlier, about ten years ago. But that eventually turned out wrong. It forced the American shale oil companies to produce more efficiently and smarter, in order to reduce the costs. And in the end she succeeded so well that it gave the shale production in the US that huge boost in the ten years after that.

However, whether the shale oil sector in the US can repeat stunt is the question. The oil fields have now been emptied even further than they already were. And despite Trumps promises to relax the rules, there are environmental agencies at a state level that seem to make oil companies a bit more difficult. In Texas, the mighty Railroad Commission, local supervisor on the oil sector, is concerned about leaks from underground reservoirs in which shale companies with chemicals have struck contaminated water. The supervisor would recently threaten with production strictions, Reporting news agency Bloomberg. Leaks could lead to polluted drinking water and can jeopardize humans and animals.

In this way, an OPEC prize war could give the American oil companies an extra push down. And with that Trumps ‘unleash plans’ too. It is reminiscent of Trumps first term. Then when he took office, he announced by decree measures that the coal industry had to bring back to life. But that failed too.

Perhaps a significant sign: Elon Musk, Trumps former adviser who has since withdrawn from that role, said last week that he thinks oil will eventually be passé. And the plans of Trump so vain hope. « Compared to sun, oil represents nothing, » he wrote on x.

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