Energy executives heading to Houston for CERAWeek this week are contending with a sense of buyer’s remorse regarding President Donald Trump’s re-election. Initially, Trump’s return was seen as a victory for the fossil fuel sector, especially given his “drill, baby, drill” mantra, which resonated with oil and gas companies frustrated by President Joe Biden’s policies.
However, the mood has shifted as discussions at the conference are increasingly focused on Trump’s tariffs, sanctions, and efforts to address the Ukraine war, all contributing to volatility in financial markets and uncertainty in the energy sector. Benchmark Brent crude prices have dropped to around $70 per barrel, a significant decline from $87 a barrel at the previous year’s conference.
While lower energy prices were a cornerstone of Trump’s campaign, sustained low prices could force companies, particularly U.S. shale drillers, to reevaluate their investment strategies and dividends. This could jeopardize Trump’s ambitions for U.S. oil production, which currently leads the world at about 13.5 million barrels per day, with modest future growth projected.
Despite the challenges, Trump has maintained strong support from the oil and gas industry for actions like ending Biden’s freeze on LNG terminal permits and promising to streamline the federal permitting process. Chevron CEO Mike Wirth noted a more balanced dialogue with the administration but expressed a desire for Trump’s executive orders to become durable legislation for the industry’s long-term stability.
However, concerns remain, especially following the recent termination of Chevron’s production license in Venezuela. In times of geopolitical upheaval and shifting economic policies, many energy executives are feeling the strain.
While they welcomed some of Trump’s actions, like lifting bans and easing regulations, his recent tariffs triggered trade war fears and increased uncertainty, adding further pressure on investment decisions. Energy companies are now learning to navigate a tumultuous environment where their recommendations may go unheeded, marking a departure from the stability they hoped for.