Goldman Sachs analyst Daan Struyven and others recently said in a report that U.S. President Trump has posted nearly 900 articles on social media about the dominance of oil and U.S. energy. Based on Trump's various statements, analysts speculate that Trump's "preference for West Texas Intermediate Crude Oil (WTI) seems to be around $40 to $50 per barrel."

"When I saw this statement, my first reaction was that this was impossible." Professor Wang Nengquan, a member of the Expert Advisory Committee of the National Energy Commission, said in an interview with the First Financial reporter that the price of WTI crude oil at $60-62 per barrel is the breakeven point for US shale oil producers, which is lower than this level. "There is no way to do new shale oil and gas projects in the United States."

As of the time of publication of the First Financial reporter, the price of Brent crude oil was US$63.46 per barrel, and the price of WTI crude oil was US$60.58 per barrel, both of which have fallen by about 15% this year.

Wang Nengquan analyzed that both WTI and Brent crude oil prices are already at the "bottom line". If they continue to fall, domestic oil and gas production in the United States is expected to decline.

US shale oil and gas producers are under pressure

Trump said during his campaign last October that he hoped gasoline prices would drop below $2 per gallon, and said that the price of gasoline at $1.87 per gallon when he left office in 2021 was "an absolutely beautiful number." Earlier this month, he even posted a statement saying that "gasoline prices have just fallen below $1.98 per gallon, the lowest level in many years" and used this to demand the Federal Reserve to cut interest rates, but this statement was subsequently refuted.

The continued decline in international oil prices put pressure on U.S. oil and gas producers, especially shale oil and gas producers with higher production costs.

The latest data from the U.S. Energy Information Administration (EIA) shows that U.S. crude oil production fell from 13.465 million barrels per day last week to 13.367 million barrels per day, down 264,000 barrels per day from the all-time high set in the week of December 6, 2024.

Data from energy technology services company Baker Hughes shows that the total number of active drilling rigs in the United States in the week of May 9 was 578, a decrease of 25 from the same period last year, and oil drilling platforms were 474, a decrease of 22 from the same period last year. The number of natural gas drilling platforms decreased by 2 compared with the same period last year.

The latest monthly report released by the International Energy Agency (IEA) on May 15 local time also lowered its expectations for US shale oil production.

According to reports, executives of several private and independent oil companies in the United States have met with Texas Senator Cruz, U.S. Secretary of Energy Wright, U.S. Environmental Protection Agency Director Zelding and members of Congress in recent weeks.

Several executives said they hope Trump will provide tariff exemptions for oilfield equipment and convince leaders of the Organization of Oil-producing countries (OPEC+) to limit production or set a bottom line for oil prices by supplementing strategic oil reserves.

Trump's trip to the Middle East is about to end, and a White House official has said he has convinced OPEC+ to be in the plan. Saudi Aramco CEO Amin Nasser said it will expand its Motiva refinery in Texas, U.S., to integrate chemical production.

Differences

As early as the campaign period, Trump shouted the slogan of "drilling, baby, drilling", promising to significantly increase US energy production and position himself and the Republican Party as hope for the development of the US oil industry. It is reported that after re-election, Trump expressed his statement to oil company executives gathered at Mar-a-Lago, "If I can't be president, you will be finished."

The US fossil energy industry once expressed support for the Trump administration's agenda to restore "American energy dominance". It is reported that relevant companies provided strong support for Trump's inauguration. Chevron donated $2 million, while Occupy, ExxonMobil and ConocoPhillips donated $1 million each. The political action committee of the industry group American Petroleum Association also donated $500,000.

Since taking office, Trump's approach to relaxing regulation and speeding approvals to "release" more supply has been welcomed by the industry. However, participants in the US oil industry expressed opposition to the aforementioned crude oil price below $50 per barrel, and even there were different opinions within the Trump administration.

Wright, founder of Liberty Energy, a U.S. oil and gas fracturing service company, said the price is "unsustainable" for U.S. oil and gas producers. He said the Trump administration will not set oil prices but is committed to eliminating “artificial barriers” to production such as over-regulation and climate rules.

Wang Nengquan analyzed that if we want to achieve the two goals of reducing energy prices and increasing domestic fossil energy extraction at the same time, oil prices need to be in a reasonable range. "The price of crude oil remains around $60 per barrel, which should be able to balance domestic inflation in the United States and encourage the production of oil, gas and traditional fossil energy in the United States." He said that at the same time, it can also promote the resolution of the Ukrainian crisis and other foreign policy goals of the Trump administration to a certain extent.

Bob McNally, founder and president of consulting firm Rapidan Energy Group and energy adviser to former U.S. President Bush, said Trump's current position on energy issues seems to confirm what U.S. oil executives are worried about: if they get caught between high output and low prices, Trump will choose the latter.

"If there were any questions about which style he prefers before, it wouldn't exist now," said McNally.