As the anniversary of US President Donald Trump’s second inauguration approaches, the impact of his oil and gas strategy is evident. The administration has focused on licensing reforms and tariff exemptions to boost exploration and production, leading to increased oil and gas output. However, oversupply is now hindering further investment.
Under the Biden administration, oil and gas production levels were already on the rise. Crude oil production saw a 1.05% increase year on year, while dry natural gas increased by 0.2% to 37.72 trillion cubic feet. In contrast, Trump’s administration witnessed a 5.56% increase in crude oil production and projected a 3.9% increase in dry natural gas production.
Despite the growth in production, lower oil prices and high cost inflation are limiting further investments in the industry. Vice-president of policy for the Institute for Energy Research, Kenny Stein, believes that any increase in production will be gradual and driven by efficiency improvements or technology advancements.
Trump’s administration has emphasized expanding exploration and drilling activities through licensing reform and tariff exemptions. The administration has greenlit leasing on federal lands and reversed Biden’s moratoriums, allowing operations to proceed according to congressional statute.
Trump’s administration enacted the One Big Beautiful Bill Act, which outlined an offshore lease plan with 36 oil and gas licenses, including auctions in the Gulf of Mexico and Alaska’s Cook Inlet. The Department of the Interior also released a draft of the 11th National OCS Oil and Gas Leasing Programme for 2026-31, including 34 potential offshore lease sales.
The oil and gas sector has shown enthusiasm for the increased access to federal lands and waters for drilling under Trump’s administration. The American Petroleum Institute’s CEO, Mike Sommers, praised the regulatory agenda and access to federal lands and waters provided by the administration.
In addition to licensing reforms, Trump’s administration ended the pause on granting licenses for new LNG export projects to non-Free Trade Agreement countries. This move, along with other export-related approvals, has contributed to a 55% increase in drilling permits in the first year of Trump’s presidency, according to analyst Paul Hasselbrinck.
Overall, the oil and gas sector has welcomed the regulatory changes implemented by Trump’s administration, including increased access to federal lands, the lifting of LNG export pauses, and the approval of various export projects. These changes have contributed to growth and investment in the industry. The EPA proposes repealing emissions standards and rules for power plants set by the Biden-Harris administration, aiming to benefit the oil and gas industry. Trump has not applied tariffs to oil and gas imports due to potential profit loss. The US relies heavily on imported feedstocks for petroleum production.
Steel tariffs imposed by Trump have increased manufacturing costs for oil and gas companies, affecting profit margins. EY estimates a 5.6% cost increase for semi-finished steel products. The overall uncertainty of tariffs and trade is more damaging to the industry than individual cost hikes.
Despite challenges like inflated costs and declining rig count, the oil and gas industry remains positive due to deregulation trends and increased licensing under Trump. The administration aims to rescind burdensome regulations and promote comprehensive reform for the sector, emphasizing durability regardless of political shifts.
EPA administrator Lee Zeldin declared a reconsideration of regulations “throttling” oil and gas, calling it a significant deregulatory moment. Of the 31 regulatory actions under review, two have been finalized, including an 18-month extension for the industry to meet emissions standards. The industry welcomes delays in implementing regulations. The Trump administration is focusing on crafting durable rules for offshore drilling to balance production levels and reduce emissions while encouraging innovation. The approach includes heavy licensing and light tariffs to support the industry’s growth and sustainability.
Source: Offshore Technology
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