Despite Donald Trump’s promises of “American energy dominance”, the U.S. oil industry is now facing a sharp slowdown, and consumers continue to pay high gas prices. New data reveals a dramatic drop in oil and gas drilling activity in Texas, the heart of U.S. energy production, while oil companies and global alliances like OPEC+ continue to manipulate supply and pricing to protect profits. This is not free market capitalism, it’s a price protection racket, enabled by an administration that talks populism but serves corporate interests.
Top 3 Takeaways from the Article on U.S. Oil Production Decline Under Trump:
- Domestic drilling is collapsing while tariffs add uncertainty. Texas drilling permits fell to a four‑year low in April 2025 (570, down 28 percent in a month), reflecting a wider national slowdown triggered in part by Trump’s “Liberation Day” tariffs, which spooked markets and undercut investor confidence.
- Foreign producers are filling the gap and gaining leverage. As U.S. operators idle rigs in the Permian and elsewhere, OPEC+ is boosting output by 411,000 barrels per day, expanding its grip on global prices and undercutting Trump’s promise of “energy dominance.”
- Big Oil is protecting profits, not prices. With production curtailed at home, companies keep supplies tight—and pump prices high—while the administration’s policies enable the strategy, leaving consumers to shoulder higher gasoline costs even as U.S. output declines.
Drilling Activity Hits a Four-Year Low
In April 2025, Texas operators submitted only 570 new drilling permit applications, according to energy analytics firm Enverus. That’s a 28% drop from March’s 795 applications and the lowest number since February 2021. This is not a seasonal blip; it’s a structural slowdown driven by multiple converging factors, including falling oil prices, geopolitical instability, and, crucially, the Trump administration’s new trade war.
Following Trump’s announcement of sweeping new tariffs, dubbed “Liberation Day” by the administration, markets reacted with panic. The move triggered fears of a global recession, sending oil prices into a tailspin and chilling investor confidence in domestic production. Ironically, it was a self-inflicted wound: tariffs intended to bolster U.S. competitiveness instead added uncertainty and pressure to an already fragile energy market.
Permian Slowdown Reflects Broader National Trend
The Permian Basin, which straddles West Texas and southeastern New Mexico, is the epicenter of U.S. shale production. It accounts for roughly half of total U.S. crude output, producing 6.39 million barrels per day (bpd) as of April. Yet even here, production is retreating.
Drillers have been scaling back rapidly. Two rigs were taken offline last week alone, bringing the total number in the Permian to 287, the lowest since December 2021, according to Baker Hughes. Major producers are cutting back even more dramatically: Diamondback Energy is dropping three rigs this quarter, with more cuts possible; Coterra Energy is reducing its 2025 activity by three rigs; and Matador Resources is eliminating one rig by mid-year.
These are not isolated belt-tightening measures. They signal a deeper anxiety in the industry about demand, price stability, and the unpredictable trade policies coming out of Washington.
OPEC+ Raises Output While U.S. Pulls Back
At the same time that American producers are retreating, OPEC+ is stepping up. The cartel of oil-exporting nations and their allies agreed to increase production by 411,000 barrels per day in June, their second consecutive monthly hike. This coordinated move is designed to take advantage of the U.S. slowdown, and it’s working.
OPEC+ controls prices by adjusting supply, and with the U.S. sidelined, their leverage is growing. While Trump touts his America-first energy policy, the reality is that foreign producers are filling the gap created by declining U.S. activity, giving them more power over the global oil market.
The Real Story: Profit Over Production
Here’s the kicker: oil companies are not losing money. In fact, they’re still raking in profits, even with falling production. How? By limiting output and keeping supply artificially low, they help sustain elevated gas prices at the pump. This is a classic price protection scheme: produce less, charge more.
So while drilling rigs go offline and workers face layoffs, Big Oil continues to protect its margins. Instead of ramping up production to lower prices, they’re pulling back, and the Trump administration, far from intervening, is enabling this behavior by adding uncertainty to the market and failing to counter OPEC+’s aggressive tactics.
The Bottom Line
Donald Trump campaigned on unleashing American energy, but under his leadership, U.S. oil production is falling, OPEC+ is gaining ground, and consumers are paying the price. This isn’t just market fluctuation; it’s a policy failure. The administration’s reckless trade war has destabilized the industry, and its cozy relationship with oil executives has allowed corporations to suppress output and inflate prices.
Call it what it is: crony capitalism in the oil patch. While the rhetoric promises independence, the reality looks more like dependence on foreign producers, manipulated markets, and a shrinking domestic industry too nervous to invest.
Meanwhile, everyday Americans are stuck paying the bill.