Companies are struggling to break even and facing difficulties replacing equipment due to falling oil prices and tariffs, according to the outlet
The US oil industry is growing increasingly disenchanted with President Donald Trump’s policies, according to Bloomberg. Falling crude prices and tariffs are making the situation untenable for producers, especially smaller ones, the media outlet has reported.
During his campaign, Trump adopted “drill, baby, drill” as one of his signature slogans, promising to revitalize the industry, which he claimed was being strangled by former President Joe Biden’s environmental policies.
While the US oil industry strongly supported Trump’s candidacy, “some executives are now feeling shortchanged” as crude prices have slid by 20% since he assumed office in January. West Texas Intermediate tumbled to as low as $55 per barrel last month.
The downtrend in oil prices is helping the US president make good on his campaign pledge to lower inflation, but this is coming at a cost for domestic oil producers, according to the outlet.
While industry giants such as Exxon Mobil and Chevron are more resilient to low oil prices, smaller independent producers are already feeling the impact. This is evidenced by a combined $1.8 billion in spending cuts announced by such firms over the past several weeks, according to Bloomberg.
The news outlet quoted Andy Hendricks, the CEO of Patterson-UTI Energy Inc. as saying that “$50 oil and ‘drill, baby, drill’” are “incompatible.”
The multi-front tariff war that Trump has unleashed against much of the world is also hurting American oil producers, since much of the equipment they use is imported from China, Korea, Brazil, and Mexico. This means that routine repairs have now become a “source of anxiety” for the industry, the article claimed.
The media outlet quoted Kirk Edwards, former chairman of the Permian Basin Petroleum Association, expressing incredulity over why the US oil and gas industry is “being picked on as a scapegoat in this whole tariff plan.”
Bloomberg, citing company officials, reported that executives representing a number of private and independent oil companies have met in recent weeks with Texas Senator Ted Cruz, Energy Secretary Chris Wright, Environmental Protection Agency administrator Lee Zeldin and congressional representatives to convey their grievances.
Several executives interviewed by Bloomberg reportedly said they want Trump to establish a price floor for oil by persuading OPEC leaders to cut production during his Middle East visit, as well as to provide tariff exemptions for oil field equipment. The president is scheduled to visit Saudi Arabia, Qatar, and the United Arab Emirates from May 13 to May 16.
