US shale bosses have warned President Donald Trump that his mission to seize Venezuela’s oil sector and drive down crude prices will put American output on the chopping block.
Trump is set to meet US Big Oil chiefs on Friday, but executives at large independent drillers — who are not on the attendee list — are seething over the president’s plan to flood America with Venezuelan crude.
“We’re talking about this administration screwing us over again,” said a top executive at one of the country’s leading shale groups, describing the plans as “against American producers”.
“If the US government starts providing guarantees to oil companies to produce or grow oil production in Venezuela I’m going to be . . . pissed.”
Trump’s drive to open up Venezuela’s oil riches, potentially subsidising investors, has further strained relations with oil executives in Texas, who have been angered by his dogged pursuit of ever-lower crude prices.
The ire in the shale industry — where many executives bankrolled the president’s return to office — echoes a frustration in the Maga movement that Trump is neglecting his “America First” mantra.
But problems in Texas’s oil industry are mounting, as cheaper oil forces producers to idle rigs needed to keep production ticking higher.
The US is the biggest producer in the world, but its pivotal shale production requires continuous drilling to keep growing. The number of operating US oil rigs last week was just 412, down by 15 per cent in a year.
The Energy Information Administration forecasts that the US’s record-high output will fall by about 100,000 barrels a day in 2026 as drillers retreat — the first annual drop since the Covid-19 pandemic.
Trump flew to Texas multiple times in 2024 to tap deep-pocketed oil barons for cash, making executives angry at what some describe privately as a “betrayal”.
“To me, the signal from the administration is: we’d rather spend our American money on propping up a Venezuelan oil business than supporting our current independent businesses,” said Kirk Edwards, chief executive of Latigo Petroleum, a private producer based in Odessa, Texas, who donated to the president’s re-election campaign.
Only the biggest energy groups, such as ExxonMobil, Chevron and ConocoPhillips, have access to the tens of billions of dollars in capital, teams of lawyers and security protection needed for a foray into Venezuelan oil.
For smaller US operators, a revitalised Venezuelan industry — if Trump can pull it off — means worsening the market glut.
Shale drillers need a barrel of West Texas Intermediate, the US benchmark, to trade above $60 to turn a profit. Its price fell below $56 a barrel this week and the EIA said it would average $51 a barrel this year — a forecast made before Trump’s Venezuela move opened the prospect of a new wave of supply.
Exporters in the Opec cartel, including Saudi Arabia — which has launched two price wars in just over a decade to recapture market share from the US — have been adding production in recent months, triggering more alarm in Texas.
“I think it’s an appropriate reaction by US shale to be miffed,” said Dan Pickering, founder of Pickering Energy Partners. “Not just because Venezuelan production might go up but because the US government, in theory, is going to subsidise that.”
He added: “These guys are already worried about price. They live in a country where the president wants the price of their output to go down.”
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Shares in the leading independent US oil groups tumbled this week as traders bet the Venezuelan oil surge would hit them hard. Diamondback Energy, APA Corp and Devon Energy each lost as much as 9 per cent.
“Somebody’s looking at these stocks today going, why would I own this if in a few years, they’re going to be competing against Venezuela for oil, for our refineries in the United States?” said Edwards.
The price of crude has halved since mid-2022 when WTI surged past $120 a barrel following Russia’s full-scale invasion of Ukraine. Gasoline prices have fallen to about $2.80 a gallon. As Trump looks ahead to midterm elections this year, he would prefer crude prices closer to $50 a barrel and gasoline below $2 a gallon.
US energy secretary Chris Wright said on Thursday that Big Oil’s arrival in Venezuela could push up its output as much as 50 per cent to 1.2mn barrels a day within 12 months.
“I think you’ll see more downward pressure on the price of gasoline,” he told Fox News.
Shale executives said Wright, a former oilfield services boss whose appointment by Trump was cheered in Texas, had abandoned his roots.
“He gets it [but] he is just toeing the party line,” said one Midland shale executive, who noted industry relations with Wright had grown strained.
But the executive placed more of the blame on Trump, saying there was “absolute frustration” in the industry at the president.
“He’s definitely not pro oil as far as independent oil companies’ survival and vibrancy. The message will have to come in US production declining,” the person said.
Trump’s comments this week that US taxpayers could help reimburse big oil groups that invest in Venezuela sparked more ire in the shale patch.
“We should not subsidise the big companies in trying to retool Venezuela’s infrastructure and develop their reserves for them,” said another prominent shale executive.
Trump, he said, did not care if smaller oil groups “drill their way into oblivion” and did not “give a damn if they went bankrupt”.
Analysts said the fallout made clear that as the prospects for future production moved beyond US shores, America’s well-resourced oil giants were now solidly in the ascendancy.
“All of this points to the advantage of being larger,” said Maynard Holt, chief executive of Houston-based energy consultancy Veriten.
“Because many of the opportunities that are coming — whether it’s Venezuela or Algeria or some other complicated place — you will be able to consider them more seriously the larger you are.”