President Trump’s second-term promise of lower oil prices and increased production faces significant challenges from within the US oil industry itself. American oil producers, already operating at record levels, appear reluctant to further increase supply in a market experiencing a price slump.
The US oil industry, having achieved record production levels in recent years, seems hesitant to heed President Trump’s call for a drilling boom. This reluctance stems from the pressure of already declining oil prices, making further increases in supply less appealing. The Energy Information Administration reports that US oil production averaged a record 13.4 million barrels per day in 2024, the third consecutive year of record-breaking output. Concurrently, Brent crude, the international benchmark, saw a 4% decline over the past year.
This dynamic has transformed the US into a global energy leader, but it has also made energy giants wary of oversupplying the market. Earnings reports from ExxonMobil and Chevron, the two largest US oil companies, reflect this cautious outlook. Both CEOs expressed concerns about the industry’s prospects in the coming year, citing the downward pressure on revenues and profits from falling crude prices.
ExxonMobil CEO Darren Woods explicitly stated the correlation between decreasing crude prices and diminishing industry profits. Chevron, despite achieving record production levels in 2024, reported a 17% decline in annual profit, emphasizing the need for continued capital discipline. This sentiment resonates across the industry, with a Dallas Fed survey revealing that 43% of oil and gas executives plan to maintain or decrease capital expenditures in 2025. Furthermore, 71% reported stagnant or decreased oil production in the fourth quarter of 2024.
These findings challenge President Trump’s ambitious energy agenda, which includes slashing energy prices by half and declaring a “national energy emergency.” JPMorgan Asset Management highlights the contradiction between the declared emergency and the record-high energy production levels, suggesting that companies are unlikely to drastically increase supply and risk further price reductions.
Industry experts concur that President Trump’s rhetoric, while encouraging to executives, overlooks the delicate balance of supply and demand in the global oil market. Rystad Energy analyst Matthew Bernstein suggests that investor priorities focused on returns will likely outweigh political considerations.
Rising interest rates, significantly higher than at the start of President Trump’s first term, further complicate the picture. Anas Alhajji of Energy Outlook Advisors points to increased borrowing costs and rising decline rates in shale fields as deterrents to production expansion. He contends that most investment will be directed towards offsetting natural production declines, leaving little room for substantial increases.
Overall, analysts predict stable oil prices in the coming year, with Goldman Sachs forecasting Brent crude to average around $78 per barrel in 2025, a modest increase from current levels. The confluence of record production, cautious industry sentiment, and economic factors suggests that President Trump’s energy goals face a steep uphill battle.
