Since he came into office in January 2025, United States President Trump has been pushing oil companies to “Drill, baby, drill!” However, despite being given free rein to increase oil production, several oil and gas companies have been cautious of increasing output too much due to volatile energy prices and the huge expense of conducting new exploration and drilling operations. Therefore, countries facing shortages, due to the ongoing geopolitical crisis between the U.S. and Israel with Iran and other Middle Eastern powers, cannot simply turn to the United States to fix their energy problems.
The United States is the world’s biggest crude oil producer, with its production reaching a record five billion barrels per year in 2025, which is over 13 million bpd. If other fuels, such as ethanol or liquefied petroleum gases, are considered, U.S. oil production increases to 21.2 million bpd, double that of Russia or Saudi Arabia, according to the International Energy Agency (IEA).
In recent weeks, Western oil companies have seen their profits soar as oil prices have been pushed ever higher and more governments have turned to these companies to alleviate them from the ongoing oil shortages. The U.S.-Israeli attack on Iran in February and the ongoing war have prompted the closure of the Strait of Hormuz, a key trade corridor connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. The strait is used to transport around 20 percent of the world’s oil when fully operational, but only a small fraction of that has passed through the waters in the last two months.
Nevertheless, these Western oil producers are mostly unwilling to invest their high revenues into new drilling activities at present. In late April, there were fewer rigs drilling wells in the United States than when the war started, according to the energy firm Baker Hughes. And while U.S. oil production has risen significantly in recent years, domestic production may fall in 2026, according to the U.S. Department of Energy (DoE).
Several U.S. oil and gas companies have become more conservative in their operations due to the significant price volatility of fossil fuels and uncertainties around future demand. Developing new wells and preparing them for oil extraction can take several months, during which time the geopolitical situation and related oil prices could change substantially. Further, many oil companies have already published their spending plans, and deviating from them could risk their profits.
The chief investment officer for the Houston financial services firm Pickering Energy Partners, Dan Pickering, questioned, “Do you want to be the dumb guy that sees oil at $100, raises your budget 25 percent and then watches oil plummet?” Most oil executives seem to agree that the answer is no.
Exxon Mobil and Chevron have both stated that they do not intend to drill much more oil than they had planned to before the war, despite reporting higher profits over the last two months. “We feel like we are producing the maximum amount that we can,” Exxon’s chief financial officer, Neil Hansen, stated of the company’s work in West Texas and New Mexico. Exxon is also being cautious about spending while its Persian Gulf assets are at risk.
It is not only the big players that have shut down plans to raise their crude output. A Federal Reserve Bank of Dallas survey of oil and gas executives in April revealed that most respondents believed that U.S. oil production would remain flat or increase this year by less than 250,000 bpd, roughly 2 percent, because of the war in Iran — if it rose at all. If that figure is correct, the output would replace less than 3 percent of the 10 million barrels of oil that are lost each day due to the Strait of Hormuz closure.
“Compared to the global problem, that’s like putting a garden hose into an Olympic-size swimming pool that’s been emptied,” the CEO of Diamondback Energy, Kaes Van’t Hof, said at an April Columbia University energy conference.
In addition to not being able or willing to rapidly ramp up oil production, the United States produces a very specific type of oil, a very light crude. Much of the U.S. refining capacity handles heavier crude, which it imports from countries such as Venezuela. “Shale fields are already operating near their maximum capacity. And the crude oil coming from the Permian Basin is of insufficient quality for many U.S. refineries,” explained Rapidan Energy’s CEO, Scott Modell.
Several challenges are preventing U.S. oil firms from ramping up production to fill the gap left by the shortage of Persian Gulf crude, including the high but volatile price of oil, limitations in existing oil fields, the lack of refining capacity, and the uncertainty of future oil prices. Despite Trump’s big promises to significantly boost domestic oil production, the limited increase in U.S. output is unlikely to fill the gap to any great extent, leaving several countries worldwide facing severe energy shortages.
By Felicity Bradstock for Oilprice.com