Oil Executives Stay Silent on Trump and Tariffs

Oil Prices Plummet as Executives Express Concern over Trade Policies

Oil prices have reached their lowest point in nearly four years, sparking alarm among market watchers and industry leaders alike. With U.S. oil trading around $60 per barrel and rising costs creating a ripple effect through the economy, many are growing increasingly concerned that President Trump’s aggressive trade policies could push the country toward an economic recession.

Despite these alarming trends, executives within the oil and gas industry have largely chosen to remain silent publicly. Driven by a desire to maintain favorable relations with the Trump administration, many industry leaders have refrained from vocal criticism of the tariffs imposed over the past several months. However, behind closed doors, the sentiment is markedly different. An anonymized survey conducted by the Federal Reserve Bank of Dallas showcased a pervasive atmosphere of uncertainty, with executives expressing distress over the unpredictable market environment fostered by current trade policies.

The implications of further declines in oil prices are serious. Should prices dip significantly below the $60 mark, many companies may be compelled to cut back on drilling operations, reduce capital expenditures, and ultimately lay off workers. This would have devastating effects, particularly in oil-rich states like Texas, which thrive on the vitality of the energy sector.

Oil executives have historically supported Trump, donating millions to his campaign with the expectation that his administration would champion their interests. Yet recent developments suggest that mere proximity to the White House may not be enough to buffer the industry against external economic pressures.

Dan Pickering, chief investment officer at Pickering Energy Partners in Houston, commented on the general sense of fear permeating the industry. While some sectors, such as finance and technology, have openly urged Trump to reconsider his trade stance, oil and gas leaders have taken a more cautious approach. They seem to be stuck between loyalty to an administration that has previously aligned with their interests and the pressing reality of deteriorating market conditions.

In response to criticisms surrounding his trade policies, Trump has maintained that his aim is to rectify trading relationships he perceives as unjust to the United States. Ben Dietderich, a spokesperson for the Energy Department, reiterated this stance, asserting that the administration’s policies benefit American consumers and ease operational burdens for energy producers.

After Trump’s inauguration, the oil industry did advocate for some exemptions from tariffs on Canadian and Mexican oil, and recent exemptions for the energy sector were granted following feedback from industry leaders. Nonetheless, the cumulative impact of declining oil prices, coupled with the administration’s trade policies, has left many in the industry uneasy.

The drop in oil prices has had immediate repercussions on stock values of major energy companies. By the end of Monday’s trading session, shares of industry giants Exxon Mobil and Chevron had plummeted by approximately 13 and 16 percent, respectively. Smaller companies have fared even worse, with stocks like that of Liberty Energy seeing declines of around 35 percent. These dramatic losses reflect a broader trend of investor apprehension fueled by the ongoing trade war and its ripple effects on supply and demand dynamics.

In a separate blow to American oil interests, the OPEC Plus group recently announced plans to increase oil production, further intensifying concerns about oversupply in a potentially faltering global economy. Coterra Energy CEO Tom Jorden noted the perilous situation, suggesting that market turbulence has resonated across every facet of the industry. While he refrained from commenting directly on the tariffs, he acknowledged the challenging choices confronting the president.

For others in the industry, the sentiment ranged from apprehension to cautious optimism. Michael Oestmann, president of Tall City Exploration IV, underscored the importance of patience, expressing hope for a quick recovery in the market despite current challenges.

Privately, however, industry executives have conveyed feelings of trepidation regarding the unpredictability that accompanies the current administration’s trade strategies. Anonymously reported sentiments from a March survey highlighted deep-rooted concerns over rising operational costs and the chaos that tariff policies create within commodity markets. The uncertainty has been so profound that one seasoned executive remarked he had “never felt more uncertainty” in his four-plus decades in the business.

Calls for clarity and stability have emerged, particularly in light of the administration’s approach, which some executives have characterized as chaotic and detrimental to long-term planning. Industry figures have pushed back against the notion suggested by White House adviser Peter Navarro that oil prices should be driven down to $50 a barrel. Prominent oil backers, such as Harold Hamm, have argued that such low prices would render drilling impractical.

While it may take time for the recent downturn in oil prices to translate to lower consumer prices at the pump—where regular gasoline currently averages $3.26—there are growing fears that retaliatory trade actions similar to those observed with China could further impact U.S. exports, particularly in the liquefied natural gas sector, which could soon face tariffs nearing 50 percent.

For the time being, some executives remain “cautiously optimistic,” hopeful that the turbulent waters will settle and allow the market to stabilize. However, with uncertainty looming large, many are left to wonder how long this optimism can hold in the face of mounting pressure from both domestic and international fronts.