Trump's 'Liquid Gold' Plan: Can He Really Make America Rich Again, or Do Oil Giants Hold the Real Power?

Donald Trump aims to strengthen America's economy by tapping into its oil and gas reserves. In his inauguration speech, he declared, "We have something that no other manufacturing nation will ever have—the largest amount of oil and gas of any country on Earth, and we are going to use it."

As of Jan. 1, 2024, Rystad Energy claims that the United States had 156 billion barrels in total potential production. In comparison, Saudi Arabia has proven reserves of 247 billion barrels. Russia has 143 billion barrels, Canada has 122 billion barrels and Iraq with 105 billion barrels round out the top five.

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According to the US Energy Information Administration, the nation has led world output for much of the last decade. Sure, at 13.3 million barrels per day in 2023, America outpaces Saudi Arabia and Russia–a fact–but analysts said growth is finally plateauing after reserves deplete and new opportunities for drilling fade. Companies also focus on returns to shareholders nowadays rather than growth and resource expansion.

Matthew Bernstein, a senior analyst at Rystad Energy, told Fortune magazine recently, “Industry decisions are politically agnostic. Companies are focused on corporate strategy, shareholder returns, and capital discipline.” Unless Trump’s policies improve profitability, oil executives are unlikely to change course.

The opportunity is to take some of the future volumes from the 2030s and 2040s and bring them forward,” Robert Clarke, vice president of upstream research at Wood Mackenzie, told Fortune. But he doubts the country will return to its peak growth rates of adding 1 million b/d annually.

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The Trump administration could offer tax breaks, fast-track permitting or put more federal acreage up for drilling. Clarke said competitive federal acreage could shift the landscape on where companies drill. At the same time, Bernstein argues that this may lead companies to “cannibalize” their current investment.

According to the EIA, in 2023, the first purchase price of American crude oil averaged $76 per barrel, compared to $27.56 in 2003. Still, even with record-high prices, producers are cautious not to overproduce the resource and subsequently lower prices. “Oil companies face calls to produce more while also dealing with rhetoric about lowering prices,” Clarke said.

Even with policy changes, experts agree that long-term investment strategies won’t be dictated by politics alone. Bernstein said to Fortune, “Investment decisions aren’t made for the next quarter, but for the long run-10, 20, even 30 years ahead.” Clarke said accelerating future production could push the plateau in U.S. output well beyond forecasts, changing market perceptions. But he reiterated how profitability is still key to the industry.

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