The oil and gas industry in Texas, once a major supporter of President Donald Trump, is experiencing growing discontent as crude prices continue to decline sharply. Key industry figures, who previously applauded Trump’s efforts to reduce regulatory barriers and implement oil-friendly policies, now find themselves grappling with market volatility exacerbated by the President’s trade war strategies and new tariff implementations.
Kirk Edwards, President and CEO of Latigo Petroleum and former chairman of the Permian Basin Petroleum Association, voiced his concerns at a recent event in Odessa, Texas. Edwards highlighted the industry’s sense of shock over the rapid decline in oil prices, which have plummeted to around $57 per barrel. This price point is significantly below the profitability threshold for many companies operating in the sector.
The situation is further compounded by the Organization of the Petroleum Exporting Countries (OPEC) announcing a substantial production increase, which has pushed oil prices even lower. Meanwhile, President Trump has celebrated the prospect of cheaper gasoline, projecting prices potentially dropping to $2.50 per gallon or less—a stance that resonates with consumers but aggravates stakeholders in oil-dependent regions.
Bryan Sheffield, managing partner at Formentera Partners LP based in Austin, expressed skepticism about Trump’s alignment with the industry’s interests. Sheffield remarked on the perceived disconnect, suggesting that Trump’s background might not align with the oil sector’s intricate challenges. This sentiment reflects a broader industry apprehension that Trump’s policies might not adequately consider the complexities of the domestic energy landscape.
Further criticism emerged from Kaes Van’t Hof, President of Diamondback Energy, who emphasized via a social media platform the vital role of U.S. shale in national economic growth. Van’t Hof underlined the sector’s contributions to job creation, manufacturing, and trade balance improvements over the past decade, urging the necessity for Trump to develop a comprehensive plan to support this critical industry.
As the industry navigates these turbulent times, the call for strategic and informed leadership becomes increasingly pressing. The Texas oil and gas industry, a cornerstone of the U.S. economy, seeks clarity and effective policies to sustain its pivotal role in energy production and economic stability.