OGV Energy Magazine January 2025 - USA Energy Review

By Tsvetana Paraskova

President Donald Trump and his energy policies continued to dominate the US oil and gas industry talk at the end of the year.

President-elect Trump has promised a boom in US drilling, with the now famous ‘drill, baby, drill’ catchphrase from the campaign trail. The incoming President has also pledged to undo key climate policies, mandates, and initiatives enacted by outgoing President Joe Biden.

President Trump is expected to prioritise oil and gas from day one. The Trump transition team is reportedly drafting an energy package to expand domestic oil and gas drilling on federal lands and offshore lease sales, and to accelerate LNG export permits.

The oil and gas industry is cautiously optimistic about the new administration and its policies, as it hopes for a permitting reform to speed up energy infrastructure projects, but has warned that ‘drill, baby, drill’ is unlikely to be the narrative in the oil patch in the coming months.

‘Drill, Baby, Drill’?

ExxonMobil does not expect US producers to adopt a “drill, baby, drill” mode once Trump becomes US President, as companies will seek to maintain their spending discipline of the past few years, ExxonMobil Upstream President Liam Mallon said at the Energy Intelligence Forum conference in London in November.

“A radical change (in production) is unlikely because the vast majority, if not everybody, is focused on the economics of what they're doing,” Mallon said at the event, as carried by Reuters.

The priorities of the US oil industry have drastically changed since Trump’s first term in office, as companies are now focused on distributing more of the profits to shareholders. The oil and gas sector has made huge progress in capital discipline and efficiency gains in recent years. Analysts say that prioritising returns to investors and financial frames capable of withstanding oil price volatility will remain paramount for the US shale patch.

Producers continue to favour profit over production growth, so the next US president is unlikely to have a direct impact on America’s shale output, Rystad Energy analysts said ahead of the US presidential election.

“Shale production has proven to be incredibly resilient, and we expect it to continue to play a major role in the global energy landscape for years to come,” said Matthew Bernstein, Senior Analyst, Upstream Research at Rystad Energy.

“At the end of the day, the industry is driven by market fundamentals, not by politics.”

Trump's Goals and Impact on Industry

After the election, Rystad Energy said that overall US drilling and completion activity is set to decline by roughly 1 percent in 2025.

“Barring any immediate short-term change to a call on US oil production, it is difficult to formulate a thesis that would reverse the oilfield service trend in 2025 due to the incoming Trump administration,” the analysts wrote in a note.

Moreover, tariffs on products such as Oil Country Tubular Goods (OCTG) and carbon steel plate material, widely used for pressure vessels in oil and gas facilities, could immediately impact operators’ costs, according to Rystad Energy.