By Felicity Bradstock – Apr 03, 2025, 4:00 PM CDT
- Oil executives have voiced concerns about the Trump administration’s energy policies, particularly regarding tariffs and the resulting uncertainty for project planning and costs.
- While public statements from oil executives have been generally positive, an anonymous survey revealed significant apprehension about the administration’s approach and its potential impact on the commodity markets.
- Despite the shift towards prioritizing fossil fuels, industry leaders anticipate a plateau in US oil production and emphasize the importance of generating free cash flow over continuous growth.
As U.S. President Donald Trump looks increasingly likely to shift away from the Biden-era acceleration of renewable energy deployment in favour of the expansion of the fossil fuel industry, oil executives are calling on the government to create greater market stability. The U.S. energy market has boomed in recent years, largely due to the introduction of former President Biden’s Inflation Reduction Act (IRA), which attracted high levels of green financing, and the increase of domestic oil and gas production. Favourable federal policies have allowed oil and gas majors to expand production to meet the high international demand while investing revenues in the development of renewable energy and clean tech. However, since Trump came into office in January, many energy companies have been left in limbo, uncertain of whether the government will continue to support the green ventures they have invested so heavily in and how future project costs will look.
During Trump’s first month in office, he signed a flurry of executive orders signalling a renewed support for fossil fuel projects and a halt on the expansion of the green energy sector. This led several oil executives to call for greater stability in the country’s energy policy, following several years of heavy investment in green energy and clean tech.
In March, the Federal Reserve Bank of Dallas conducted a survey with oil executives from around 130 firms, in which they were promised anonymity, to understand their opinion on the new administration’s approach to energy. In the survey, one executive stated, “The administration’s chaos is a disaster for the commodity markets.” They added, “‘Drill, baby, drill’ is nothing short of a myth and populist rallying cry. Tariff policy is impossible for us to predict and doesn’t have a clear goal. We want more stability.”
Several executives stressed that Trump’s tariffs on steel had increased costs, making it difficult to plan for projects. Another executive said, “Uncertainty around everything has sharply risen during the past quarter… Planning for new development is extremely difficult right now due to the uncertainty around steel-based products.”
The responses from the anonymous survey were a stark contrast from those given publicly by executives during a conference in Houston earlier in the month. The oil executives attending the conference were generally enthusiastic about the change in administration and praised Trump for his approach to energy. Ryan Lance, the CEO of ConocoPhillips, said that the new Energy Secretary Chris Wright and the Secretary of the Interior Doug Burgum “understand the business,” describing them as the best energy team the U.S. has seen in decades. Meanwhile, Patrick Pouyanné, the CEO of TotalEnergies, said he was “impressed by the quality of our counterparts”, and Mike Wirth from Chevron said the industry is “seeing some reality come back to the conversation.”
Despite their publicly positive responses to Trump’s first moves regarding energy, the CEOs of Chevron and Conoco both said that U.S. oil production would likely plateau following the record-high output seen over the last two years. “Chasing growth for growth’s sake has not proven to be particularly successful for our industry,” Wirth said. “At some point, you’ve grown enough that you should start to move towards a plateau, and you should generate more free cash flow, rather than just more barrels,” he added.
Oil prices fell from a peak of $78.6 a barrel in January to $70.5 a barrel in April. Peter Navarro, a senior White House aide, has said that reducing oil prices to $50 a barrel could help tackle inflation. However, such low prices would mean companies operating in the U.S. would lose money drilling new wells.
When it comes to tariffs, there are concerns from several industries due to the uncertainty of which tariffs will be introduced when, to who, and how high. Trump has repeatedly threatened the introduction of tariffs across several industries and on multiple countries, but investors have been in wait-and-see mode when it comes to project development, due to the uncertainty over future costs. After several weeks of waiting, Trump introduced sweeping tariffs on 2nd April, declaring a national economic emergency and announcing tariffs of at least 10 percent across all countries, with rates going even higher for 60 countries deemed the “worst offenders.”
The new tariffs will have a knock-on effect on the energy industry, not only on oil and gas but on project development across all energy sectors, as imported materials become more expensive. This was a fear for several energy executives and only time will tell how much the new tariffs will affect the industry. However, Trump’s recent policy moves are a far cry from the stability requested by many energy executives when he came to office, which will likely prompt greater critique of the new administration’s approach to energy and industry.
By Felicity Bradstock for Oilprice.com
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Felicity Bradstock
Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.
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