Terrel Hardin found himself at a diner on Route 66 in western Oklahoma when he received troubling news: one of his oil rig’s engines had malfunctioned. In earlier times, a $6,000 fix would have sufficed, but due to President Donald Trump’s trade war disrupting supply chains, he was unsure if the required part would even be available.
The mix of tariffs and uncertainty surrounding equipment deliveries has transformed what used to be a routine problem for Hardin’s King Well Service into a significant stressor. This is worsened by plummeting crude prices, partially driven by the trade tensions, which could hinder the drilling of new wells.
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“What Trump is doing isn’t really helping,” reflected the 63-year-old. “He’s certainly smarter than I am, but I doubt he wakes up each day hoping for oil prices to return to $70,” he added. “But I do.”
The US oil sector had strongly backed Trump’s re-election efforts, yet some executives are now feeling neglected. The president’s trade policies have increased the costs of purchasing and fixing equipment, while crude prices have decreased by more than 20% since he took office, worsened by rising supply from OPEC.
Declining oil prices meet a primary promise of Trump’s campaign—to lower inflation—and are generally beneficial for the broader economy, pleasing voters. However, as the US becomes the world’s leading crude producer, this decline is placing pressure on Republican strongholds like Texas, Oklahoma, and North Dakota.
“You can’t have $50 oil and still shout ‘Drill, Baby, Drill,’” asserted Andy Hendricks, CEO of Patterson-UTI Energy Inc., which has the second-largest fleet of onshore drilling rigs in the US. “Those two ideas just don’t go together.”
Trump’s trade policy is raising costs for the purchase and repair of drilling equipment.
Recently, executives from various independent oil companies have met with Texas Senator Ted Cruz, Energy Secretary Chris Wright, and EPA Administrator Lee Zeldin, among others. Their collective message underscores that Trump’s trade conflict and repeated praise of falling oil prices may push record US production into decline.
While major oil companies like Exxon Mobil Corp and Chevron Corp are willing to endure these challenges, particularly with the expectation of reduced regulation and simplified permitting long-term, smaller independent producers—the backbone of the US shale industry—are voicing their dissatisfaction.
“The industry’s call to Congress is ‘Reclaim your authority,’” stated Steven Pruett, CEO of Midland, Texas-based Elevation Resources LLC, who met with Cruz last month. His worry centers on the belief that major economic policies are being shaped by executive order. “That’s no way to govern, and it hinders corporate leaders from effectively managing their operations.”
Cruz’s office did not respond to requests for comments. Representatives from the EPA and Energy Department indicated their focus is on minimizing regulations to reduce costs for consumers and oil companies alike, ultimately improving profitability.
Trump is set to visit the Middle East soon to meet with OPEC leaders, who have agreed to boost production levels, leading to West Texas Intermediate prices falling as low as $55 a barrel—well beneath the breakeven point for many US shale operations. Several executives have voiced a desire for Trump to grant tariff exemptions for oil field equipment and to establish a price floor by convincing OPEC leaders to limit production, similar to the steps he took after the price drop in early 2020, or by replenishing the Strategic Petroleum Reserve.
Kirk Edwards, a former chair of the Permian Basin Petroleum Association, voted for Trump last year and continues to back Republican initiatives. His office displays a framed photo with Trump, both smiling at a fundraiser last year.
“There’s nothing more quintessentially American than the oil and gas industry,” said Edwards, who runs a small privately owned oil company. “So why are we being targeted as scapegoats in this tariff situation?”
His concern is understandable. With crude prices falling below the average breakeven level for most new US onshore wells, oil companies find it difficult to fulfill the president’s directive to unleash energy dominance, according to Clayton Seigle, a senior fellow at the Center for Strategic and International Studies in Washington. “Investors aren’t focused on energy dominance,” he noted. “They prioritize energy dividends.”
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Nevertheless, for every oil executive or worker bemoaning falling oil prices, many other Americans gain from lower gasoline prices, which help household budgets.
The Trump administration has already begun enacting measures that may reduce costs for offshore oil operations, such as regulatory changes allowing simultaneous extraction of crude from multiple Gulf of Mexico reservoirs, potentially increasing output and unlocking stranded reserves. The Interior Department has proposed plans to alleviate costs for offshore producers by revising the financial assurances required to address aging wells and infrastructure. The EPA is also working on initiatives to lower costs for onshore operators.
Trump inherited a vibrant US oil industry, producing nearly 13.5 million barrels daily, providing employment and a level of energy independence not experienced since before the 1970s OPEC oil embargoes. His promises to support America’s “liquid gold” energized supporters in the oil sector who felt besieged by President Joe Biden’s environmental policies.
However, just four months after his inauguration, producers have begun cutting crews, shutting down rigs, and slashing expenditures as they cope with rising costs and diminishing revenues due to falling oil prices.
“As a result of these activity reductions, there’s a considerable possibility that US onshore oil production has peaked and will start to decline this quarter,” cautioned Travis Stice, CEO of Diamondback Energy Inc., the largest independent producer in the Permian Basin of western Texas and eastern New Mexico, in correspondence with shareholders. “We are at a tipping point.”
The primary route through Texas’s oil region includes a 15-mile stretch of Interstate 20 between Midland and Odessa, likely the most concentrated area for steel sales in America. This region resembles an open-air shopping district, providing everything necessary for crude oil extraction. Drilling rigs and powerful generators for fracking fleets of the world’s largest oil field service companies are situated alongside family-owned stores selling pipes, pumps, hard hats, and flame-retardant suits.
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Much of the essential equipment is imported from China, Korea, Brazil, and Mexico, meaning it’s subjected to tariffs. Predictions indicate a 40% year-on-year hike in prices for tubular goods in the fourth quarter of 2025, as noted by Wood Mackenzie, an industry consultancy.
Tie Specialties, a store along this highway route, is referred to as the “Home Depot of the oil field” by its owner, Mark Waters. He supports Trump’s tariffs and his push for low energy prices, believing these initiatives will benefit the nation in the long run; however, he admits he’ll earn less in the short term. Sales dropped around 15% in April compared to the previous year.
“I smile when these folks passionately back the Republican Party,” Waters joked. “We typically thrive during Democratic administrations. I prospered during the Clinton, Obama, and Biden years.”
His view is not popular in West Texas.
“I brought that up at the country club, and I thought someone would stab me with a butter knife,” he quipped.
Wright, Trump’s Energy Secretary, has long-standing ties to Midland, having previously served as CEO of the fracking firm Liberty Energy Inc. He is acutely aware of the challenges facing his former colleagues in the oil sector: Liberty’s stock has declined nearly 50% since Trump took office on January 20.
Wright asserts that the Trump administration doesn’t dictate oil prices but is devoted to removing “artificial barriers” to production, such as excessive regulation and climate policies.
“Our goal is to facilitate smoother energy production in the United States,” he stated during an interview with Bloomberg TV on April 25.
However, he appeared to acknowledge the difficulties faced by those in the oil industry.
Chris Wright
“Fifty dollars a barrel isn’t sustainable for our producers in today’s climate,” he remarked. “A favorable scenario involves both a solid consumer base and robust producers.”
In recent weeks, independent US oil explorers have collectively announced $1.8 billion in spending cuts, largely within the Permian Basin, the world’s largest shale area. Currently, many of these companies, including Occidental Petroleum Corp and Devon Energy Corp, claim that increased efficiencies will result in minimal or no impact on production this year.
However, looking ahead, the outlook is less optimistic. A 10% decrease in US capital expenditures could lead to a 400,000 barrel-per-day reduction in production, as estimated by S&P Global. Furthermore, a consensus is forming that sustained drops in oil prices to the low $50 range would require further cutbacks.
On a recent afternoon, an electronic sign near the Petroleum Club in Midland, Texas, captured the mood, showcasing the dwindling number of rigs operating across the Permian Basin alongside the declining crude prices.
It also featured a quote often attributed to Winston Churchill: “No matter how appealing the strategy, it’s vital to assess the results periodically.”
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