During his campaign, former President Donald trump positioned himself as the savior of the U.S. oil industry, vowing to shield producers from what he termed “green fanatics” within the Democratic party.Though, the reality of the oil market under his policies paints a different picture, one of increased volatility and challenges for many producers.

The Mar-a-Lago Warning and WTI’s Plunge

At a private dinner held at his Mar-a-Lago headquarters with oil industry representatives, Trump reportedly issued a stark warning: If I am not president, you are in P*DELI. Yet, even during his presidency, many oil companies faced important headwinds. The price of West Texas Intermediate (WTI),the U.S. benchmark, experienced a notable decline, dropping from $80 to $60 per barrel. This price point is especially critical for shale-dependent companies, as it frequently enough represents the threshold for profitability.

The Impact of Trump’s Policies on Oil Prices

While the Trump administration rolled back certain environmental regulations and sought to streamline the permitting process for new drilling, its broader business policies inadvertently undermined global oil demand. Experts suggest that Trump’s efforts to drive down prices may have inadvertently incentivized OPEC to increase production, exacerbating the oversupply in the market and further depressing prices.

Smaller Miners Face the Brunt

Lower oil prices disproportionately threaten smaller miners, who constitute a significant portion of the U.S. shale sector. Unlike industry giants such as ExxonMobil or Chevron, these smaller companies typically have higher operating costs and less productive wells. According to Rystad Energy, these companies require an average price of at least $63 per barrel to cover costs, debt interest, and dividends. At current prices, many are operating at a loss.

Customs Policy Adds to the Burden

Adding to the challenges, oil companies face increased costs due to tariffs imposed during Trump’s presidency, particularly on steel components essential for mining operations, including pipes, tanks, and borehole reinforcements. While larger corporations possess greater bargaining power and broader resource bases, smaller companies often struggle to pass these costs on to their suppliers.

Industry reactions and Investment Cuts

The industry’s response to these pressures has been swift. Diamondback Energy announced a $400 million reduction in investment. Similarly, other companies, including Coterra Energy, EOG Resources, and Matador, are planning to scale back their mining operations.Travis Stice, head of Diamondback, cautioned that if low prices persist, U.S. extraction will soon decline.

Hamm’s Influence and the Push for Fossil Fuels

Despite the challenges,Trump maintains a strong base of support among smaller oil companies. Harold Hamm, a billionaire and influential entrepreneur from Oklahoma, serves as their informal spokesperson, advocating for the oil industry. Hamm reportedly played a role in the appointment of Christopher Wright, a shale mining pioneer, to a leadership position within the Department of Energy.

Investing in “Green” Technologies

Hamm recently convened a private meeting of miners in Tulsa, Oklahoma, to discuss strategies for using natural gas to power data centers and securing government support for fossil fuels at the expense of renewable energy sources. Four members of Trump’s administration reportedly attended the meeting.

ExxonMobil’s Shift Towards Low-Carbon Technology

While smaller players continue to rely on Trump, larger companies like exxonmobil are hedging their bets by investing in low-carbon technologies. ExxonMobil plans to allocate up to $30 billion to projects related to emission reduction and hydrogen production. Trump has expressed a desire to cancel these programs.

Conflicting Interests and Uncertainties

The oil industry is characterized by diverse and sometimes conflicting interests. While Trump promises a return to the “oil golden age,” his policies have so far generated uncertainty and challenges for many U.S. producers.