Some oil patch execs say "drill baby drill" isn't happening

[BumRushDaShow]

Source: Axios

6 hours ago


President Trump wants to "drill baby drill." But many producers in the heart of the oil patch have other plans — and some say Trump's trade policies are discouraging drilling.

Why it matters: Many things affect gasoline prices. But producers' caution about growing output could limit how much prices at the pump might fall by helping avoid a large market glut of oil.

Driving the news: The Federal Reserve Bank of Dallas on Wednesday released its latest quarterly survey of execs in its region that includes the prolific Permian Basin.

These anonymous surveys are hot commodities for anyone seeking the industry pulse.

Threat level: "The Liberation Day chaos and tariff antics have harmed the domestic energy industry," one executive told the Fed.

"Drill, baby, drill will not happen with this level of volatility. Companies will continue to lay down rigs and frack spreads," said the exec, one of several who criticized the tariffs.

Read more: https://www.axios.com/2025/07/03/dallas-fed-oil-drilling-decline

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The U.S. is already pumping out a record amount - in the 13 +/- million bbls/per day range.



(from here - https://wolfstreet.com/2025/03/04/u-s-production-exports-of-crude-oil-petroleum-products-hit-new-record-in-2024-imports-dipped-further-spr-refilling-halted-in-february/

Also EIA current - https://www.eia.gov/dnav/pet/hist/leafhandler.ashx?n=pet&s=mcrfpus2&f=m )

[Ray Bruns]

1. Oil is a global commodity. The market determines the price. If oil producers aren't going to make

A profit by drilling and pumping more oil, they aren’t going to do it.

But since stinky doesn’t understand basic economics, he’s going to keep saying stupid stuff.

Maybe he should have taken those classes in college himself instead of paying someone to take them for him.

[Mr. Sparkle]

2. and that there is why we have records temperatures for the past decade

smh

[electricmonk]

3. I don't know what the general consensus of Mr Global is

but I find his take on the oil and gas industry pretty honest and accurate. Here he talking about oil prices dropping and the potential for the US setting a production record for 2025.

[Septua]

6. The U.S. has been the top crude oil producer for several years and...

..already set 'records'. Current production is down because inventories are up, among other things.

https://oilprice.com/Energy/Crude-Oil/Oil-Falls-as-US-Crude-Gasoline-Inventories-Rise.html

Trump has spewed distorted information about 'energy independence' and high gasoline prices forever, trying to blame Biden for high gas prices while taking credit for $2 gas that was the result of a 40% drop in demand during Covid.

Our oil producers import heavy crude oil because existing refineries were designed for processing heavy crude oil. They export more than they import and they export light crude because they produce more light than heavy.

Energy independence is an ambiguous concept

https://usafacts.org/articles/is-the-us-energy-independent/

U.S. crude oil production hit a record 13.47 million barrels-per-day in April, up from 13.45 million bpd in March, according to data released by the Energy Information Administration as part of its Petroleum Supply Monthly series.

https://finance.yahoo.com/news/us-crude-oil-output-hit-153009830.html

Trump may know all this but if so, he knows it doesn't sell well for him so he sells his lies instead.

[patphil]

4. A lot of what Trump says is just grandstanding for his base. Drill, baby, drill is no exception.

Although we both import and export oil, we are a net oil exporter. If we produce more, we'll only drive the price of crude down, which will result in a net loss of profit.
In other words, there isn't going to be a big rise in drilling until the current glut of oil is over.
That's the reason Trump wants to slow the progress of electric vehicles. But, that not going to happen. Inertia is already moving the markets in that direction, and will continue to do so.

[maxsolomon]

5. It matter not a whit if production actually increases.

What's important is SAYING it did. Claiming a victory, spiking the ball in Liberal's faces. Trump could give a flying fuck if gas prices decline.

We're post-truth now, "Oil Patch Execs" (who likely voted for MFer).

[Septua]

7. And they were already at max production when Trump...

..was saying that. The oil industry lost a lot of money during the Covid reduced demand for gas...they had to shut down refineries and wells. The price of crude went to nothing...

On 20 April 2020, the West Texas Intermediate (WTI) crude oil price dropped to negative levels for the first time in history.

https://pmc.ncbi.nlm.nih.gov/articles/PMC9756000/

Once demand picked up, the oil companies took their time in getting production up, to take advantage of supply/demand principles and recoup some of their losses.

[Cheezoholic]

8. With this bill passing he may make them drill at gunpoint because he now feels he's Supreme Leader material lmao n/t

[mwooldri]

9. Don't forget OPEC+

I believe they have been wanting to up production.... to drop the price of crude. Partly to punish some of its members for overproducing, part to dissuade the Americans from pumping more.

[BumRushDaShow]

10. They did agree to up the production

and that is why the idiotic "drill baby drill" would kill frackers who have a higher "breakeven" than others.



(ETA above graph from here - https://www.hartenergy.com/exclusives/us-shale-basins-boast-54bbl-average-breakeven-price-204563)

The Israel-Iran hostilities briefly shot the price up but as of today (latest showing) it is at $67.18 (as of 4:48 pm EDT) - (dynamic price link) https://www.marketwatch.com/investing/future/cl.1

[catrose]

11. It would be hard to make a profit from Alaska crude

It’s solid at room temperature, makes California crude (the nastiest in production so far) look sweet. I’m not sure we know how to process it. In one of the stupidest budget cuts until Elooon, the govt shuttered the National Petroleum Lab more 25 years ago. They did our oil and gas research, but someone thought it was more important to keep the national coal lab open.
For a while, companies drilling in Alaska got tax breaks. When the tax breaks went away, so did the companies.