Drill, Baby, Drill?

 Yeah, that ain’t gonna happen:

Burkhard and Stewart added that the U.S. remains on track to register its first year-on-year oil production decline in roughly a decade, with total U.S. crude oil and condensate production (including offshore) expected to fall 600,000 barrels per day from mid-2025 to the end of 2026.

“The price of oil and Wall Street remain the de facto regulators of U.S. crude production. The onset of conflict in Iran briefly injected a fear premium into oil prices, and fresh uncertainties do remain. But the fundamentals are the fundamentals, and the oil price trend remains the same — downward,” Jim Burkhard wrote in the report.

There is no market incentive to increase domestic oil production, even if Trump opens ALL federal land to drilling with free leaseholds and a free MAGA cap for every roughneck.

Momentary price spikes aside, Burkhard wrote that the recent conflict and now uneasy ceasefire between Israel and Iran has done little to alter the trajectory of global oil markets. S&P Global expects supply to outstrip demand by 1.2 million barrels per day in the second half of 2025, contrary to the second half of 2024 when demand exceeded supply. A surplus of 800,000 barrels a day is expected for the entirety of 2026.

“A year or more into the future, could a focal point in the market be how much Iran could increase production rather than attempting to close the Strait of Hormuz or damage oil infrastructure in other countries? Perhaps. In the meantime, expect more oil supply from the Middle East, regardless,” commented Ian Stewart, associate director at S&P and co-author of the report.

The two have base projections for Dated Brent prices to be in the $50-$60 range later this year and into 2026. That equates to between the upper $40s and the upper $50s for West Texas Intermediate.

It's a global oil market. Biden controlled it by using the Strategic Petroleum Reserve to control how much was on the market. I’m guessing OPEC decided they could play that game, and Trump cluelessly abandoned it because “Biden did it.”

At any rate, demand is slack and supply is plentiful, so Trump might as well declare authority over the tides. Trump taking credit for gasoline prices is like Trump taking credit for the sunrise.