\u201cWe\u2019re talking about this administration screwing us over again,\u201d said a top executive at one of the country\u2019s leading shale groups, describing the plans as \u201cagainst American producers\u201d.<\/p>\n
\u201cIf the US government starts providing guarantees to oil companies to produce or grow oil production in Venezuela I\u2019m going to be\u2009.\u2009.\u2009. pissed.\u201d<\/p>\n
Trump\u2019s drive to open up Venezuela\u2019s 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.<\/p>\n
The ire in the shale industry<\/a> \u2014 where many executives bankrolled the president\u2019s return to office \u2014 echoes a frustration in the Maga movement that Trump is neglecting his \u201cAmerica First\u201d mantra.<\/p>\n But problems in Texas\u2019s oil industry are mounting, as cheaper oil forces producers to idle rigs needed to keep production ticking higher. <\/p>\n 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. <\/p>\n The Energy Information Administration forecasts that the US\u2019s record-high output will fall by about 100,000 barrels a day in 2026 as drillers retreat \u2014 the first annual drop since the Covid-19 pandemic.<\/p>\n 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 \u201cbetrayal\u201d.<\/p>\n \u201cTo me, the signal from the administration is: we\u2019d rather spend our American money on propping up a Venezuelan oil business than supporting our current independent businesses,\u201d said Kirk Edwards, chief executive of Latigo Petroleum, a private producer based in Odessa, Texas, who donated to the president\u2019s re-election campaign.<\/p>\n 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. <\/p>\n For smaller US operators, a revitalised Venezuelan industry \u2014 if Trump can pull it off \u2014 means worsening the market glut.<\/p>\n 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 \u2014 a forecast made before Trump\u2019s Venezuela<\/a> move opened the prospect of a new wave of supply.<\/p>\n Exporters in the Opec cartel, including Saudi Arabia \u2014 which has launched two price wars in just over a decade to recapture market share from the US \u2014 have been adding production in recent months, triggering more alarm in Texas.<\/p>\n \u201cI think it\u2019s an appropriate reaction by US shale to be miffed,\u201d said Dan Pickering, founder of Pickering Energy Partners. \u201cNot just because Venezuelan production might go up but because the US government, in theory, is going to subsidise that.\u201d<\/p>\n He added: \u201cThese guys are already worried about price. They live in a country where the president wants the price of their output to go down.\u201d<\/p>\n Recommended<\/p>\n
![\"Oil](\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fimages.ft.com%2Fv3%2Fimage%2Fraw%2Fhttps%253A%252F%252Fd1e00ek4ebabms.cloudfront.net%252Fproduction%252F027993fc-6545-423f-b2a2-1d3e8d3c2625.jpg%3Fsource%3Dnext-article%26fit%3Dscale-down%26quality%3Dhighest%26width%3D700%26dpr%3D1?source=next&fit=scale-down&dpr=2&width=240\")
<\/a><\/p>\n