Trump wants more drilling, but the oil market is already saturated
grist.org
Despite President's Trump directives, oil companies can't drill if there is little market for their product.

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Of the 2,206 active leases in the Gulf of Mexico, only a fifth are producing oil, according to records from the Bureau of Ocean Energy Management, which regulates offshore drilling. Oil industry executives and analysts say the current number of 448 oil-producing leases is unlikely to grow significantly, even if Trump makes good on promises to expand leasing opportunities and expedite drilling permits.

The market is saturated with oil, making companies reluctant to spend more money drilling because the added product will likely push prices down, cutting into profits.

“It’s not the regulations that are getting in the way, it’s the economics,” said Hugh Daigle, a professor of petroleum engineering at the University of Texas in Austin. “It’s true that there are a bunch of undeveloped leases in the Gulf, and it’ll stay that way if we continue to see low or stagnant oil prices.”

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  • Laser@feddit.org
    11·
    4 hours ago

    This is something that never made sense to me. The US is already a net exporter for oil (dunno if refined or whatever) but the economy is not limited by fossil fuel availability.

    Other nations are trying to move away from oil, especial China which was a huge market for ICE cars to until recently.

    Also, you’d be insane to rely on the US for essential goods for the next 4 years and possibly beyond. So you have a commodity that is seeing less international use in its prime market, a supply larger than demand, and yet ask other nations to lower the price which in turn makes your product less desirable or profitable (https://www.reuters.com/business/energy/opec-yet-react-trump-call-lower-oil-prices-2025-01-24/) while proving you’re a terrible partner.

    Meanwhile, Trump ran on increasing production. It makes no sense.

    What is the end goal here? Can someone explain?

    • Soulg@sh.itjust.works
      3·
      2 hours ago

      Trump is an idiot who doesn’t know what he’s doing, his supporters are equally stupid and were told that we weren’t drilling almost any oil and believed it implicitly. Therefore Trump has to drill more oil. Because more oil good

    • MutilationWave@lemmy.world
      3·
      3 hours ago

      All the rural voters need to know about economics is that the guys who work in oil make big bucks. They drive big trucks so you can tell.

      They think drilling more oil means everybody get big truck.