(Bloomberg) – The angry mutterings at the Permian Basin Petroleum Association’s “Spring Swing” golf tournament this week weren’t all about missed putts or lost balls. The Texas oilmen on the fairways had a more serious concern: The president they helped elect was tanking oil prices.
The market rout sparked by President Donald Trump’s trade war is touching almost every part of the economy. But there are probably few industries feeling more aggrieved right now than U.S. shale oil. Over the last 15 years, it has made America the world’s top crude producer, lowered energy costs and fueled a boom in petrochemicals and natural gas exports. It also contributed heavily to Trump’s election campaign.
And yet half of the 20 worst-performing stocks on the S&P 500 Index since Trump announced his tariffs April 2 are in the oil, gas and petrochemical sector, while crude prices have plunged to the lowest in four years.
“I don’t know an industry that was more supportive of Trump than the oil and gas industry,” said Kirk Edwards, a former chairman of the Petroleum Association who attended the tournament Monday in the West Texas town of Odessa, which lies in the middle of the Permian amid a landscape dotted with pumpjacks. “People are in shock at how quickly he can get the price of oil down.”
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The growing unease reflects how Trump’s effort to re-write global trade rules is undermining his goal to supercharge US fossil-fuel production and achieve “energy dominance.” Executives are loathe to boost US oil supply with West Texas Intermediate down about 23% since Trump’s inauguration less than three months ago. It’s now hovering under $60 a barrel, below the level they say they need for new wells to break even, according to a survey by the Federal Reserve Bank of Dallas.
Adding to their woes, OPEC and its allies last week pledged to triple a production increase previously scheduled for May. The cartel announced it hours after Trump unveiled his tariffs.
On the campaign trail last fall, Trump said he didn’t care if oil companies drilled themselves out of business as long as prices fell. Now, as oil executives watch plunging prices with alarm, Trump is gleefully celebrating the fact. Gasoline, he predicts, could fall to the lowest level in years.
“It’s going to be in the $2.50-a-gallon range — and maybe below that,” Trump told reporters Monday in the Oval Office. “We’re really doing amazing. I mean, we’re cutting prices.” Gasoline prices are still well above $2.50 in most of the U.S. But the fact that the president is cheering on a further decline doesn’t sit well in the oil patch.
Several senior oil executives, who asked not to be identified criticizing the president as the trade fight plays out, expressed frustration with Trump for continually talking down the price of their key commodity, while also expressing appreciation for his push to cut regulations, ease permitting and make more federal land available for exploration.
Even before Trump announced the tariffs and helped triggered the price collapse, oil executives were privately grumbling about his trade policy. In the March 26 survey by the Federal Reserve Bank of Dallas, shale executives submitted a raft of blistering anonymous comments criticizing the president’s tariff agenda, with one calling it “a disaster for the commodity markets.”
US crude futures fell for a fourth-consecutive trading session Tuesday, dropping to $59.58. It was the first time WTI closed below $60 a barrel since 2021.
See also: U.S. should brace for decline in onshore crude output if WTI hits $50, S&P Global says
