By Kennedy Maize
President Trump came into office mindlessly mouthing a fatuous slogan from prior Republican leaders, designed to win support from the oil industry: “Drill, Baby, Drill.”
Casting a deep look at Trump’s meretricious meme, veteran oil industry consultant Michael Eisenband says, “Interestingly, to date, such efforts to spur more drilling have fallen on deaf ears in the oil patch.”
That’s because Trump and his advisers don’t know much about oil economics and seem oblivious to the driving forces of supply and demand. Alternatively, those among Trump’s coterie who do have some expertise have chosen a snappy political slogan that appeals to Americans with memories of bad energy times over reality.
Those bad days are long gone. “America is the world’s largest oil producer today, averaging nearly 13.5 million barrels per day — and we didn’t have to compromise millions of acres of federally protected land to get it done, thanks to the ‘shale oil miracle,’ which began in the first decade of this century and now accounts for a vast majority of drilling activity and energy production,” writes Eisenband of FTI Consulting.
The problem with Trump’s slogan is that if the industry were to embrace it, the result would be financially ruinous. Eisenband says, “The Trump administration’s bias for fossil fuels and its intended energy policy goals don’t seem to take into account that making it easier to drill via less regulation, favorable tax policy and lots of cheerleading won’t necessarily encourage that outcome if sustainable energy prices don’t justify more drilling.”
World oil prices have been hovering around $65-$75/barrel for the past two years. Profit margins are slim and massive new production could be a major money losing proposition. In the early days of the second Trump administration, some of his advisors, including Energy Secretary Chris Wright, believed that $50/barrel oil would be a good target, low enough to actually lower prices at the retail level and still yield an acceptable profit.
Shale pioneer and major Trump donor Harold Hamm is scornful of that analysis. Oilprice.com reported that Hamm told Bloomberg that oil producers outside the rich Permian Basin need an oil price of around $80/barrel to cover the costs of well drilling.
The U.S. oil market environment isn’t unique. According to the International Energy Agency’s report on worldwide markets for 2025, “The latest data show lacklustre demand across the major economies and, with consumer confidence still depressed, a sharp rebound appears remote. Consumption in emerging and developing economies has been weaker than expected, with China, Brazil, Egypt and India all revised down compared with last month’s Report.”
Slow demand translates to weak prices, according to the Paris-based IEA. “Volatility in oil markets slumped to near all-time lows in July as Brent crude oil futures hovered around $70/bbl,” the agency reported. “However, the early August OPEC+ supply agreement and the prospects for untenable stock builds later in the year saw Brent crude futures slip to around $67/bbl.”
Nothing looks likely to turn things around. IEA is predicting a record glut of almost three million barrels/day for 2026, which Bloomberg noted would be “even surpassing — in annual average terms — the stockpile flood unleashed during the Covid-19 pandemic in 2020.”
In Washington, the Department of Energy technical staff recognizes the continuing weakness in the U.S. oil patch. In its August “Short-Term Energy Analysis,” DOE’s Energy Information Administration predicted, “Low oil prices in early 2026 will lead to a reduction in supply by both OPEC+ and some non-OPEC producers, which we expect will help moderate inventory builds later in 2026. We forecast the Brent crude oil price will average $51/b next year, down from our forecast of $58/b in last month’s STEO.”
It’s unlikely that view has risen to the executive level at the Forrestal Building or come to the attention of the political apparatchiks at 1600 Pennsylvania Avenue.
Industry consultant Eisenband concludes that in 2025 “E&P companies are making disciplined decisions not to drill aggressively based on solid geological and economic analyses of copious amounts of formation and well-level data, as well as hard lessons learned from past mistakes. Consequently, today the slogan ‘Drill, Baby, Drill’ sounds about as relevant as ‘I Like Ike.’”
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