This story originally appeared on Inside Climate News and is part of the Climate Desk collaboration.
“We will drill, baby, drill,” President Donald Trump declared at his inauguration on January 20. Echoing the slogan that exemplified his energy policies during the campaign, he made his message clear: more oil and gas, lower prices, greater exports.
Six months into Trump’s second term, his administration has little to show on that score. Output is ticking up, but slower than it did under the Biden administration. Pump prices for gasoline have bobbed around where they were in inauguration week. And exports of crude oil in the four months through April trailed those in the same period last year.
The White House is discovering, perhaps the hard way, that energy markets aren’t easily managed from the Oval Office—even as it moves to roll back regulations on the oil and gas sector, offers up more public lands for drilling at reduced royalty rates, and axes Biden-era incentives for wind and solar.
“The industry is going to do what the industry is going to do,” said Jenny Rowland-Shea, director for public lands at the Center for American Progress, a progressive policy think tank.
That’s because the price of oil, the world’s most-traded commodity, is more responsive to global demand and supply dynamics than to domestic policy and posturing.
The market is flush with supplies at the moment, as the Saudi Arabia-led cartel of oil-producing nations known as OPEC+ allows more barrels to flow, while China, the world’s top oil consumer, curbs its consumption. Within the US, a boom in energy demand driven by rapid electrification and AI-serving data centers is boosting power costs for homes and businesses, yet fossil fuel producers are not rushing to ramp up drilling.
There is one key indicator of drilling levels that the industry has watched closely for more than 80 years: a weekly census of active oil and gas rigs published by Baker Hughes. When Trump came into office on Janunary 20, the US rig count was 580. Last week, the most recent figure, it was down to 542—hovering just above a four-year low reached earlier in the month.
The most glaring factor behind this stagnant rig count is the current level of crude oil prices. Take the US benchmark grade: West Texas Intermediate crude. Its prices were near $66 a barrel on July 28, after hitting a four-year low of $62 in May. The break-even level for drilling new wells is somewhere close to $60 per barrel, according to oil and gas experts.
That’s before you account for the fallout of elevated tariffs on steel and other imports for the many companies that get their pipes and drilling equipment from overseas, said Robert Rapier, editor-in-chief of Shale Magazine, who has two decades of experience as a chemical engineer.