Recruiter’s View

The U. S. Government is finally encouraging oil production.
So, why does the Baker Hughes Rig Count keep declining?

The Obama and Biden administrations were very clear about their intention to drive Oil & Gas producers out of business.

They ran up gas prices and promoted electric vehicles.  They cut oil production by restricting drilling permits.  They drained the U. S. Oil Reserves.  And they bought oil from foreign producers, instead of U. S. companies .

Under Trump 2.0, all of that is going away.

Setting Up For Launch

During his presidential campaign, Donald Trump promoted his Energy Independence strategy with the slogan, “Drill, Baby, Drill!”

The Oil & Gas Industry heard that and aggressively consolidated, prior to the 2024 elections.

Preparing for a Trump victory, producers positioned themselves over the most promising locations.

Even suppliers to the Oil & Gas industry began staffing up.

True to his word, Trump’s new team began work to roll back permitting restrictions.

Consumer prices fell, and inflation cooled.

In theory, every critical element is in place.

So, where’s the production boom?

Permits And Profits

Permits, alone, don’t increase oil production.

Producers also need demand.

Trump’s policies lowered some food and energy prices very quickly.

Retail Gas prices dropped around the country.

That’s great for consumers, but it doesn’t inspire oil companies to invest in new wells.  There’s no profit.

Oil prices have now hit a 52-week low.

Demand Is Dropping

Oil & Gas consumption will continue to fall.  The reason is simple.

The Tariff Wars are effectively pulling the United States back from the edge of extinction.  In the process, the disruption of international trade is enormous.

For example, U. S. Auto Sales are projected to drop by at least half a million vehicles this year.

Every other industry has its own story, especially those sourcing from China.

International Freight numbers have been hit hard.  Q1 shipments from China are the lowest in 20 years.

As international trade slows, Oil & Gas markets reflect the decline.

Creating Demand

As you might expect, President Trump is actively working to support the comeback of Oil & Gas.

He’s pushing for lower interest rates.  That will enable more purchases.

To increase U. S. auto sales, he has proposed that interest on U. S. car loans should be deductible.

The new tariff regulations are already setting up a huge boom in construction. And the whole purpose of the construction is to ignite an even bigger boom in manufacturing.

U. S. Oil Reserves must be replenished.
The perfect time to start is when oil prices are at historic lows.

And to really put it over the top, President Trump is promoting oil exports to foreign nations.

This is a powerful combination of economic drivers.  It’s certain to increase demand and to push oil prices higher.

Big Oil is waiting.
It shouldn’t take long.

Give it six to twelve months.

Recruiter’s View

Oil & Gas might play dead for half a year.

In reality, the industry is poised to explode.

Expect huge opportunities when Big Oil moves to deliver its highest production in decades.

-TD