Trump’s Trade Strategy Is A Bet On American Energy

Oil executives are skittish—and they shouldn’t be. The recent dip in crude prices, largely driven by temporary market jitters over President Donald Trump’s America First trade strategy, has energy analysts wringing their hands. But the long-term fundamentals of U.S. energy dominance remain intact—as long as we don’t allow Wall Street’s short-term panic to dictate policy.

West Texas Intermediate (WTI) crude is now hovering around $62 per barrel—just below what many shale producers say they need to comfortably fund operations, reward shareholders and reinvest in new wells. According to Rystad Energy, the all-in breakeven for U.S. shale sits at $62/bbl. And a recent Dallas Fed survey says most producers need $65/bbl to drill profitably.

That’s not ideal—but it’s far from catastrophic. This isn’t 2020. Prices aren’t collapsing due to a pandemic or a global freeze in demand. What we’re seeing is a correction fueled by uncertainty around tariffs and trade negotiations—uncertainty that President Trump himself is working to resolve through a strategic 90-day pause and targeted diplomacy.

The fundamentals of U.S. energy are strong. The shale revolution—fueled by private capital, property rights and innovation—has turned America into the world’s top producer of oil and gas. Domestic production is over 13 million barrels per day, with shale making up 70% of the total. The Permian Basin continues to lead the world in efficiency and productivity. And major producers, after years of consolidation and cost-cutting, are far more resilient to price fluctuations than they were even five years ago.

Let’s also remember how we got here. For the past three years, Biden’s war on American energy—permitting delays, EPA overreach, and ESG activism—has chilled investment and emboldened foreign competitors. Trump’s return to pro-energy leadership, by contrast, has sent a clear message to global markets—America is open for drilling, and energy is national security.

Yes, some smaller independents are feeling the pinch. Inflation has driven up labor and equipment costs. And companies operating outside of the Permian may struggle at today’s prices. But this is a cyclical industry. It’s built to weather storms. What matters now is holding the line and maintaining the strategic posture that’s made the United States an energy superpower.

Some critics are pointing to revised forecasts from the International Energy Agency, which just lowered its 2025 demand growth projections by nearly a third. That’s to be expected. The IEA consistently underestimates U.S. energy production and overstates the impact of policy shocks. More concerning are domestic analysts at the U.S. Energy Information Administration, who are forecasting WTI to average just $63.88 in 2025 and drop to $57.48 by 2026. If those forecasts prove true—and that’s a big if—we could see a pullback in U.S. output. But it’s up to Congress and the administration to avoid policies that make that prediction self-fulfilling.

The risk isn’t Trump’s trade policy—it’s a lack of confidence in America’s regulatory and tax environment. Markets are watching to see whether Republicans in Congress can extend the Trump tax cuts and provide certainty for capital-intensive industries like energy. And they’re watching to see if Democrats will continue to weaponize climate lawsuits and regulatory delays to cripple domestic production.

Meanwhile, the cost structure of global oil tells a different story. Deepwater projects in the Gulf of Mexico and Alaska break even at $37–$43/bbl. Those assets remain valuable, and they’ll continue to anchor U.S. output even if shale cools temporarily. But every part of the industry—from offshore to midstream to the service sector—faces increased costs from regulations and now tariffs, especially on steel and heavy equipment.

President Trump understands this. His energy dominance agenda is built on American abundance and independence—not deference to OPEC, Beijing or Brussels. His temporary pause on tariffs is a sign of smart leadership, not retreat. He’s buying time to negotiate better trade deals and ensure the tariffs hit China—not U.S. producers.

Energy executives should speak up—but they should also stand firm. The Biden years proved what happens when you let the left control the narrative. Investment dries up. Projects stall. Prices rise. Trump’s energy vision remains the right one: drill here, build here and sell to the world.

As first-quarter earnings roll in, investors will be watching closely to see if companies cut buybacks or capex. But let’s not kid ourselves—this is not a crisis. It’s a correction. The energy industry has seen worse and come out stronger.

With the right leadership in Washington, this moment will pass—and American energy will keep powering ahead.