How much oil can Trump actually produce?

On the surface, this energy strategy appears to significantly support Trump’s broader economic goals. For instance, boosting energy exports could reduce America’s trade deficit; higher energy-related tax revenues could help balance the federal budget; and increased oil production could help stabilize domestic fuel prices even while imposing harsher sanctions on Iran. Moreover, expanding U.S. natural gas output would not only meet the rapidly growing electricity demands of the artificial intelligence industry but also further cement Europe’s dependence on American energy. However, Trump’s optimistic aspirations may well be dashed by the complex realities of global energy markets. Constraints on U.S. Energy Production Unlike many petroleum-rich countries, oil production in the United States is primarily carried out by private companies—not state-owned enterprises. These firms decide their output levels based on commercial considerations. Since 2022, U.S. oil production has surged dramatically due to Europe’s rejection of Russian oil, making the U.S. the world’s largest crude oil producer today. In October this year, U.S. daily output hit a record high of 13.5 million barrels—up 2 million barrels per day from 11.5 million at the outbreak of the Ukraine war. Yet further increases require clear incentives for private firms—and such incentives currently do not exist. Shale oil accounts for the majority of U.S. oil production. In the past, shale oil development was driven by thousands of small, risk-tolerant enterprises. But since the late 2010s, a wave of mergers, acquisitions, and bankruptcies—triggered by overproduction and subsequent price crashes—has consolidated the industry into the hands of a few large, more cautious corporations. These firms are highly risk-averse, and their shareholders prioritize stable dividends and double-digit returns. Furthermore, as easily accessible, high-quality wells have gradually been depleted, the cost of developing new wells has risen sharply. According to a survey by the Federal Reserve Bank of Kansas City, U.S. shale producers need oil prices to reach $89 per barrel to justify expanding output. Currently, however, the U.S. benchmark crude—West Texas Intermediate—is trading around $70 per barrel—far short of that threshold. Meanwhile, market conditions also work against Trump’s energy agenda. Global oil supply remains ample, with OPEC members holding substantial spare capacity. At the same time, sluggish global economic growth and the rapid adoption of electric vehicles continue to suppress oil demand. The U.S. Energy Information Administration forecasts that, even under optimistic assumptions, U.S. daily oil production will rise by only 600,000 barrels by 2028. In December, Chevron—the nation’s second-largest energy company—even lowered its capital expenditure forecast for 2025. Although Trump may repeal certain taxes imposed by the Biden administration on energy firms—such as the methane emissions fee—these policy changes would mainly benefit small- and medium-sized drilling companies, which are precisely the largest sources of greenhouse gas emissions. According to Michael Haigh, an energy analyst at Société Générale, even tax-cut policies designed to stimulate energy output would boost production by no more than 200,000 barrels per day at most. Moreover, direct government subsidies to increase production would not only exacerbate federal fiscal pressures but also contradict Trump’s stated goal of reducing the budget deficit.

Energy and oil & gas policy outlook under Trump 2.0

A distinctive feature of the U.S. governmental system is that the Secretary of Energy does not bear primary responsibility for many decisions most directly affecting the energy industry. While the Secretary of Energy is indeed tasked with overseeing energy policy, the position’s most critical mandate relates to nuclear weapons: maintaining a safe, reliable, and effective U.S. nuclear deterrent and reducing the threat of nuclear proliferation. Many key energy-related decisions—including oil and gas leasing programs—are instead overseen by the Department of the Interior. Thus, the nomination of North Dakota Governor Doug Burgum to lead that department—and to chair the newly established White House Energy Council—carries significant implications for the sector. Like former Secretary Jennifer Granholm (referred to here as ‘Wright’), Governor Burgum acknowledges the necessity of climate action—but simultaneously champions increased oil and gas production. In 2021, he set a target for North Dakota to achieve net-zero emissions—i.e., carbon neutrality—by 2030, a goal more ambitious than California’s 2045 target. A key distinction lies in Burgum’s vision for achieving net zero: he envisions relying heavily on carbon capture and storage (CCS). As he notes, North Dakota has won a “geological jackpot” in underground CO₂ storage potential. Estimates suggest the state possesses storage capacity of 25 billion tons—enough to sequester nearly 50 years’ worth of U.S. energy-sector CO₂ emissions. North Dakota’s enthusiasm for CCS was evident last week, when its Public Service Commission unanimously approved the route permit for Summit Carbon Solutions’ proposed $8 billion CO₂ pipeline system—a project designed to collect and store emissions from ethanol plants. Despite supporting decarbonization, Governor Burgum has also strongly criticized the Biden administration’s energy policies. In June this year, he joined other Republican governors in signing a joint statement accusing President Biden of “rhetorical and regulatory hostility toward traditional energy sources,” which they claim has hindered U.S. oil and gas production. One sector the new administration may particularly favor is natural gas-fired power generation. In announcing Governor Burgum’s nomination, President-elect Trump stated his intention to “eliminate the damage Democrats have inflicted on our national grid by dramatically increasing baseload power.” To fulfill that pledge, Trump would need to rescind Biden-era emissions regulations for power plants—regulations that could ultimately force gas-fired plants to shut down. Yet Trump could go even further: Texas’s existing subsidy program for gas-fired power plants could potentially be expanded nationwide. The U.S. Oil & Gas Landscape and Policy Trends Under a Second Trump Term It was during Trump’s first term—in 2019—that the United States achieved energy independence. Within less than five years, the U.S. became the world’s top liquefied natural gas (LNG) exporter in 2023. Today, the U.S. firmly holds the position of the world’s largest producer and exporter of oil and natural gas. The American oil and gas industry has entered its third major boom—and what many call its golden age. Industry experts and media outlets hold divergent views on the outlook for U.S. oil and gas during Trump’s anticipated second term—and on the likely trajectory of related policies. (I) A large-scale, rapid expansion of U.S. shale oil and gas production will not occur.

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