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Saudi Oil Surge Challenges US Energy Leadership Under Trump’s Watch

Oil and Gas

Business Honor
14 May, 2025

Low oil prices hit US producers hard, risking energy dominance and economic strength.

The promise made by US President Donald Trump to position the US as a leader in energy production is confronted with significant obstacles. Saudi Arabia and other OPEC nations are pumping more oil, a flood of cheap crude into the world market. This action is dropping fuel prices, which Trump has celebrated, but it's also harming American oil companies.

Saudi Arabia intends to increase its oil production by almost a million barrels from June. This is lowering global oil prices—currently at about $60 per barrel—and compelling US companies to reduce their investments. Large American oil producers such as EOG Resources and Diamondback Energy are scaling down their investments. Some analysts say that 10% of US drilling rigs could close down soon since it is becoming increasingly difficult to make a profit.

Although American oil companies had backed Trump with campaign contributions in the millions, he has yet to criticize Saudi Arabia's decision. According to sources, while on his latest Middle East tour, Trump was more concerned about security and commerce than oil concerns.

Leaders in the oil industry are expressing deep concern about the current situation. Diamondback CEO Travis Stice stated that US oil production likely peaked and perhaps is now headed down. Following decades of increasing growth that transformed the US into the world's leading oil producer, this marks the end.

Experts have noted that Trump's energy strategy has two contradictory objectives: to drive up US oil production while having low gas prices. The current situation encourages low prices but will harm America's long-run energy future.

Paul Sankey, an energy analyst, cautioned that if the US continues to cut production, it may lose the energy independence it achieved in recent years. He further stated, "Selling cheap gas today might cost the US its energy leadership tomorrow."