President Trump’s “drill, baby, drill!” agenda is running up against the “wait, baby, wait,” caution of oil executives who are hitting the brakes because of a slumping economy caused by Trump’s tariffs, according to energy industry experts.

Despite recent announcements that the Trump Administration will accelerate environmental reviews for energy projects, drilling in the U.S. is down slightly so far under Trump, according to a recent report by the Energy Information Administration.

The number of active drilling rigs in the U.S. is down about 4 percent in the first quarter of the year, compared to the first quarter of 2024 under former President Joe Biden. The number of wells drilled and wells completed—meaning oil and gas have begun flowing—are both down 2 percent, according to the report.

The price of gasoline at the pump also has risen since Trump took office, averaging about $3.17 per gallon in April compared to $3.07 in January and $3.05 in November, according to federal data.

“I’d say it’s a ‘drill baby drill’ boom that is not coming to fruition,” said Anthony Kovscek, professor of energy science and engineering at Stanford University, who studies the oil and gas industry. “If you look at what some of the major U.S. oil companies are signaling, they are talking about staff cuts and budget reductions. So they don’t seem very bullish on future oil prices, for sure.”

The disconnect between how much drilling the oil industry wants to invest in and Trump’s aggressive efforts to boost oil production by slashing regulations and government oversight suggests that the environmental rules never were the major factor in the industry’s decisions, said Abhi Rajendran, director of research at Energy Intelligence.

“Permitting reforms and cutting red tape and reducing bureaucracy and smoothing out market access is great,” said Rajendran. “But at the end of the day, price is what matters the most, and prices are down since we started this tariff tantrum almost a month ago. The price dynamic has become quite negative for producers and companies.”

The price of West Texas oil last week fell to about $58 per barrel, below the threshold of $60 to $70 per barrel that oil companies need to expand their drilling and production, according to a survey by the Federal Reserve Bank of Dallas.  

A year ago, under President Biden, the price was humming along at about $78 per barrel and U.S. oil companies were producing record-breaking amounts of petroleum that made America the world leader in oil and gas production.

The stock prices of all the major oil and gas companies have fallen since Trump took office.  Chevron and ConocoPhillips were down about 16 percent in the first 100 days of “Drill, baby, drill.” BP was down 13 percent, and ExxonMobil was down 7 percent.

Chevron has announced it plans to cut some 8,000 jobs by the end of next year to bring down costs, while ExxonMobil and ConocoPhillips have said they plan to cut hundreds of jobs.

This lack of optimism by the oil and gas industry is in part because of Trump’s April 2 “Liberation Day” announcement of steep international tariffs – and then his confusing temporary retraction of some of the tariffs, but not all of them, according to Robert Kaufmann, a professor at Boston University and expert on the oil and gas industry.  

This whipsaw process baffled oil executives and hurt oil companies, which rely on international products like steel and machinery to drill wells.

“Tariffs and other economic policies have created a lot of uncertainty, and so people are factoring in a recession into their forecast, and recessions are not good for oil consumption,” said Kaufmann. “People travel less during a recession, and in general, there is less oil used, which means there is less demand for oil. So there is no rush to drill new wells.”

Another factor driving down oil prices – beyond fears of a Trump recession – is that members of the Organization of Petroleum Exporting Countries (OPEC) last month announced that they would be increasing their production of oil.

None of this, however, is benefitting consumers by providing lower gasoline prices. Trump promised to slash energy costs for American consumers by 50 percent within 18 months, but average gasoline prices have risen about 4 percent since the election.

Many oil industry executives made large campaign contributions to Trump’s election effort last year after he urged them during a meeting in April 2024 to give him a billion dollars in exchange for a “deal” that would boost the oil industry, including by rolling back environmental regulations.

The oil executives always suspected that there was going to be friction between Trump’s campaign pledges to “drill, baby, drill” and lowering the price of gasoline for consumers, said Skip York, an oil and gas expert and nonresident fellow at the Rice University Baker Institute’s Center for Energy Studies.  

This is because oil companies generally want prices to be high, but consumers want gasoline prices to be low.  

But York said that oil executives did not expect Trump’s sweeping threats of international tariffs, which have thrown the oil industry and the economy in general into a tailspin.  

“I think where they [oil executives] are surprised, frustrated, and confused is around the tariff issue,” said York. “Even if you roll back the tariffs, you are still introducing this uncertainty, and that uncertainty impacts not just the oil industry but the whole economy, which ultimately impacts oil demand.”

Because Wall Street and shareholders are now demanding more actual profit from oil and hydraulic fracturing companies – not just more oil production – than during the early days of the fracking boom, companies have grown more cautious and now think it makes no sense for them to frack any more wells unless the price of oil is at least $70 per barrel, significantly more than the $58 or so now.  

“The pressure on them is to keep delivering returns to investors,” said York. “It’s not ‘drill, baby, drill. It’s ‘profit, baby, profit.’”  

Environmentalists worry that as soon as the economy picks up again there is a real risk that Trump’s slashing of regulations and government oversight could cause major damage. For example, the Trump Administration’s Secretary of the Interior, Doug Bergum, announced on April 23 that his agency is imposing new “emergency” permitting procedures to accelerate the development of domestic energy resources and critical minerals on federal lands. permitting procedures to accelerate the development of domestic energy resources and critical minerals on federal lands.

These new procedures include requiring that environmental assessments of energy projects be completed in only 14 days, even though these assessments now normally require up to a year under the National Environmental Policy Act. The Trump Administration also suggested it may open up protected federal lands on six national monuments in the West for fossil fuel extraction.

Randi Spivak, public lands policy director at the Center for Biological Diversity, said that Bergum’s announcement suggests that the “energy emergency” is a hoax designed to ram through new mining projects and oil and gas extraction on federal lands.

“These so-called emergency procedures are nothing but grease on the skids for corporate interests to speed approvals that will harm people’s health, our public lands, and the climate,”
said Spivak. “We have plenty of energy to meet the country’s needs.”