Just 100 days into President Donald Trump’s second term, U.S. energy plans have faced turbulence. Oil prices have fallen over 20%, dropping below many producers’ breakeven points as investor confidence dwindles in light of trade uncertainties.
This decline presents a significant setback for Trump’s ambitions of achieving U.S. energy dominance. From the outset of his presidency, he emphasized increasing domestic oil and gas output, which is critical for the nation’s position as the largest producer worldwide.
Trump’s protectionist trade policies have negatively impacted projections for oil demand growth, leading to a reluctance to invest. The benchmark price for U.S. crude has sunk to around $60 a barrel, a figure not seen since the COVID-19 pandemic, and below the $65 mark deemed necessary by many producers for profitability.
Much of this plunge occurred after Trump’s “Liberation Day,” when he imposed a minimum 10% tariff on U.S. imports, causing expectations of a global economic slowdown. Industry experts like Ben Cahill have remarked that “energy dominance requires investor confidence,” which is now lacking.
Moreover, while sanctions against Iranian oil sales were implemented to curb Tehran’s nuclear ambitions, these measures also added to the industry’s uncertainties. Forecasters, including the U.S. Energy Information Administration and OPEC, have downgraded their oil price and demand growth forecasts since tariffs were imposed.
Consequently, U.S. crude producers, having pumped 13.4 million barrels a day in April, are now reconsidering drilling plans. In contrast, liquefied natural gas (LNG) has seen some success under Trump’s administration, with a push for LNG export approvals and several companies announcing investments in the sector.
However, tariffs on steel and aluminum are expected to increase overall project costs. Meanwhile, Trump’s focus on traditional fossil fuels has overshadowed low-carbon energy initiatives, raising concerns about long-term viability and sustainability in the energy landscape.