Sep 11, 2025
So far, Trump's approach to energy policy is to maximize US fossil fuel production that keeps the price of gasoline low, and it's been a winning formula. But in the latest episode of The Debrief, Eurasia Group energy analyst Gregory Brew says the Big Oil honeymoon may be coming to an end.
Trump is a fan of proclaiming "drill, baby drill," but the reality on the ground is a bit different from the mantra and could mean trouble for him in next year's midterm elections. His approach to energy policy is to maximize US fossil fuel production that keeps the price of gasoline low, provides a hedge against inflation, and also boosts us business, particularly US energy exports. So far, drill baby drill has been a winning formula. US oil and gas production are at all time highs. This summer, the US produced more oil than it ever has at more than 13 point a half million barrels a day. Oil companies are strong supporters of President Trump, who has vowed to cut regulation, boost fossil fuel exports, and also throw up roadblocks to renewables like wind and solar. But the honeymoon might be coming to an end and it's partially Trump's fault.
First, his sweeping tariffs announced earlier this year, shocked oil markets and sent the price of oil tumbling at the same time. Tariffs on things like imported steel means rising costs for US oil companies. It's now more expensive to drill a well in the United States than it was a year ago. Second, Trump is anxious to preserve his relationship with Saudi Arabia, a major oil producer, and also the head of OPEC. As a result, Trump has turned a blind eye to OPEC policy of increasing oil production this year, which has pushed prices down even further. Low prices. Rising costs means less profits for US oil companies. So why does that matter? Well, less profits means fewer jobs, a slowdown in activity and economic pain in places like North Dakota and Texas Centers of the US oil industry that also happen to be deep red states where Trump generally maintains high levels of support. That means some trouble for Trump moving into next year's midterm elections by November of 2026. Drill baby drill might seem like a hollow mantra, and that might hurt Trump's brand where it matters most.