Energy companies

Trump‘s Promised Oil Boom Faces Setback as Production Slows, Jobs cut

WASHINGTON D.C. – President Trump’s push for an American energy boom, encapsulated in the slogan “Drill, Baby, Drill,” is facing headwinds as falling oil prices and tariffs on steel and aluminum force U.S. energy companies to scale back production and lay off workers.

ConocoPhillips announced last week it will eliminate approximately 3,250 positions, roughly a quarter of its workforce. Chevron previously announced the elimination of around 9,000 jobs to reduce operating costs.

The price of crude oil has been declining, with the U.S. Energy Information Administration (EIA) projecting a price of around $50 per barrel by early 2026, a 27% drop from the $68 per barrel expected in August 2025. This decline is attributed to increased production by OPEC+ nations like Saudi Arabia,the Emirates,and Iran.

Sources within the White House indicated Trump explicitly pressured OPEC+ to increase production, threatening tariffs in an effort to maintain low gasoline prices for voters.

However, low prices combined with increased drilling costs – driven by tariffs on steel products crucial for processes like fracking – are slowing U.S. oil extraction.The Permian Basin in West Texas, responsible for over 40% of U.S. crude oil production, is particularly affected.

“Many oil companies are choosing to stay out and wait for this period to pass, let’s see if prices go up and, hopefully, tariffs are eliminated, in order to resume drilling,” said Kirk Edwards, CEO of Latigo Petroleum. He added that around 50 drilling platforms in the region have been forced to close, resulting in thousands of job losses.

Edwards described OPEC’s decision to increase production as “a slap in the face” to industry executives and workers, stating, “They are hurting us when we are already on the floor.”

The Dallas Federal Reserve confirmed a contraction in energy sector activity during the second quarter of the year, with the aggregate employment index falling from zero in the first quarter to -6.6. The EIA projects U.S. crude oil production will decrease from approximately 13.4 million barrels per day in July to just over 13 million by the end of next year.