Former President Donald Trump campaigned on a platform of “drill, baby, drill.” Recent changes hint that his protectionist tariff policy may, in spite of all intentions, deeply hurt the oil industry. As oil prices continue to slump, fears have risen across the board. Specifically, they are worried oil projects in the United States will not prove profitable in the future.
Throughout his successful 2016 campaign, Trump called for ramping up oil production. In doing so, he said this strategy would reduce gasoline prices for American consumers. Critically, his tariff policies have brought oil prices down. As a result, most of these new projects are in danger of becoming unprofitable overnight. Such a series of backtracks calls into question the legitimacy and the durability of his energy agenda and benefits to American workers.
As one of Trump’s usual Republican bastions, the energy sector is now starting to taste the bitterness of these policies. The former president pledged to support the oil industry, which he views as a vital component of the U.S. economy. Continuing limits placed on fossil fuel drilling by President Joe Biden’s administration have muddled things pretty badly. Unsurprisingly, these restrictions have resulted in a significant drop in the state’s once booming—now actively cratering—number of active oil rigs statewide.
The number of active oil rigs in the U.S. has dropped by more than half since the pandemic began. This decrease is consistent with the drop in crude prices. These are hard times for the energy community. At the same time, US trading partners such as Japan are facing the squeeze from Trump’s escalating tariff war. The hope is that these countries just buy more oil from the U.S., but this isn’t realistic given today’s markets.
With less than a month to go until the election, Trump still has the energy sector as the strongest pillar of his campaign commitments. And yet, he’s made big promises to boost oil and gas production. He asserts that this is indispensable for providing the foundation of national economic prosperity. The most daunting one is falling oil prices. It remains to be seen how much these pledges will do to reverse the trend and revitalize a beleaguered industry.