President Donald Trump has for months promised to “drill, baby, drill” and revitalize the fossil fuel industry, though as oil prices have plummeted, some within the industry doubt whether he can deliver.
Crude oil prices have fallen significantly since Trump took office in January, in part due to oversupply from increased production worldwide.
With oil prices down by around $20 per barrel since January, gasoline prices have also continuously dropped, with the national average well below $3 a gallon.
While this has provided significant relief for consumers, many oil and gas producers remain worried that lower costs of oil and gasoline — combined with supply chain constraints brought on by Trump’s tariffs — will make it difficult to increase drilling operations and thereby “drill, baby, drill.”
In the last week of December, oilfield service company Baker Hughes reported 546 active oil and gas rigs in the United States. That is 43 fewer than the number active during this time last year, in the final weeks of the Biden administration.
Numerous oil and gas executives have pointed to the rig count as evidence that production levels are slowing under Trump, despite his promises to boost the industry.
“If economic conditions worsen, drilling and completion activities will cease in 2026,” one executive said anonymously in a quarterly survey released by the Federal Reserve Bank of Dallas in December.
“A vibrant oilfield services sector is critical if and when the U.S. needs to ramp up production,” another executive said in another quarterly survey released in September. “Right now, we are bleeding.”
As of Tuesday, domestic benchmark West Texas Intermediate crude was selling at around $57.95 per barrel, while international benchmark Brent Crude was priced at $61.92 per barrel. Both are far below the $70 and $75 baselines that producers wish to see oil selling at in order to pursue new drilling opportunities and open new rigs.
As drilling companies have been forced to close rigs, producers have moved to lay off employees. Majors such as Exxon, Chevron, BP, ConocoPhillips, and many others announced thousands of layoffs this year, with some companies reducing their workforce by 25% over the next two years.
However, fewer rigs and employees have not significantly slowed domestic production, and in fact, domestic production of oil has repeatedly hit record levels throughout the year.
Kirk Edwards, former chairman of the Permian Basin Petroleum Association, told the Washington Examiner that this can be attributed to technological advancements at existing wells.
“Drill, baby, drill definitely did not happen in any stretch of the imagination,” said Edwards.
“What has happened, though, is the ingenuity of the engineers for the companies that are drilling the wells that are being drilled,” he said, explaining that existing wells are being drilled longer with better fracking technology.
“They’re able to get more out of each well than what they did before,” Edwards said. “So, technology is the winner this year, but it wasn’t because we drilled more wells.”
Karr Ingham, president of the Texas Alliance of Energy Producers and a petroleum economist, agreed, describing this phenomenon more as “produce, baby, produce.”
“If you take that in its literal form, ‘drill, baby, drill’ did not happen this year,” Ingham said. “We had fewer of everything except barrels produced. And of course, that is the part that counts.”
For some Republicans, this alone is evidence that the administration is making good on its “drill, baby, drill” promise.
“There’s been so much advancements in technologies over the last few years that we can use fewer rigs,” Jason Isaac, founder and CEO of American Energy Institute, told the Washington Examiner.
“We can use fewer drill sites. I mean, it’s amazing,” he said. “They used to drill one hole on a pad, and now there’s multiple holes, and they’re going in different directions, and so they’re being more productive with less equipment.”
There is some skepticism, however, that technological advancements will continue to prop up the market and offset lower crude prices.
Several producers have expressed concerns in recent months that production levels will plateau or even drop next year.
“There is no way that increased production can continue into 2026,” said Edwards, who also runs an independent oil and gas company. “I think it’s going to fall and fall precipitously at some point.”
Even larger oil and gas producers, such as TotalEnergies, ConocoPhillips, and Diamondback Energy, have made similar predictions.
“There is a point at $60 per barrel where we’ll see the shale industry beginning to slow down,” TotalEnergy CEO Patrick Pouyanne told Reuters in October.
However, these majors are still producing, Ingham pointed out, meaning they are still able to make profits even with the cost of oil so low.
“What we know so far is, is that it remains profitable to produce barrels of oil at current crude oil prices, because if we didn’t, they would stop,” he said.
Despite the concerns around low prices and the administration’s tariffs on steel, Ingham explained that most, if not all, oil and gas producers would prefer to operate under Trump than the previous Biden administration.
“There’s not an open hostility toward what these guys do, and there’s an appreciation for it, and the regulatory relief has been pretty strong under Trump,” he said. “It just seemed like every day under the Biden administration, there was a new set of arrows being slung at these guys. And that has stopped.”
A significant reason behind the downward pressure on prices has been the increase in global supply, as OPEC repeatedly agreed to boost production from April through December.
Trump himself urged OPEC to boost production in January in order to lower prices.
There are some within the industry who believe these oil and gas companies will be further propped up by tax incentives and leasing stability established under the One Big Beautiful Bill Act, and many remain upset with how the administration has prioritized bringing down gas prices at the expense of expanded drilling operations.
OIL EXECUTIVES PESSIMISTIC AS DRILLING ACTIVITY DIPS FOR END OF YEAR
“I think every producer in the United States, especially in Texas, is 100% a Trump fan, and for, you know, for the administration to devastate the one industry that is that keeps this country secure, which is the American oil and gas energy industry, it’s just heartbreaking,” Edwards said.
“He’s asking OPEC to over-supply the market and every time that happens, oil prices go down and gasoline prices go down,” he continued. “It’s good for the rest of the country, but it’s certainly not good for the energy security of the country.”
