Trump’s “drilling” agenda can reduce profits and test oil producers

President Donald Trump urges oil producers to “drill, child, drilling.” American oil and gas investors may not be on board With the plan.

“At the present time, with low oil prices, I think we will start seeing many companies that begin to replace the capital,” said Clark Williams-Dahrri, an energy financing analyst at the Institute of Economics and Financial Analysis.

The United States has already produces more crude oil than any other country in history. In December 2024, US oil and gas companies produced more than 13.49 million barrels of crude per day. This is the high production rate at all, according to US Energy Information Management Records.

High production rates tend to reduce prices, which benefits consumers. But if the prices decrease largely, which affects the profits of the producers, they may stop drilling.

Most Americans believe that oil prices are reflected in the price they pay for every gallon in gas stations. The retail price of gasoline fluctuates based on seasonal trends and other factors. On March 24, 2025, the average price of tendency at the level of ordinary gasoline was about $ 3.10 per gallon, according to Gasbuddy data. This is much lower than the country’s highest price for more than $ 5 per gallon, in June 2022, according to Gasbuddy data.

US gasoline prices are expected to decrease by 11 cents in 2025 and 19 cents in 2026, according to the expectations of the US Energy Information Administration.

According to EIA, crude oil prices in the United States accounted for about 52.6 % of the average gasoline retail price in 2023, which is the latest data available.

The future track of crude oil prices is a major concern for investors in the oil and gas industry.

On March 24, 2025, the immediate price of the United States standard for crude oil, West Texas, was hovering to less than $ 70 a barrel. Analysts at S& P Global Commodity Insights expect WTI to an average of $ 66 a barrel in 2025.

Low oil prices affect the profitability of oil and gas business, which they must sell on global markets.

Producers surveyed from the Federal Reserve in Dallas in March 2024 that they would need to sell oil at “equivalent” prices of about $ 64 a barrel in order to make a profit from digging new wells.

“This is a real challenge to obtain oil prices at a level that producers feel comfortable with, but consumers can also coexist with him,” said Williams -Dari.

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