Energy Secretary Chris Wright said on Thursday that the oil market is discounting President Donald Trump’s push to produce more crude and gas in the United States.
“We’ve seen a market discounting the fact that clearly it’s going to be easier to produce oil and gas in the United States,” Wright told CNBC’s “Squawk Box” on Thursday. “More supply is going to come, and that’s pushed down prices of oil, gasoline, home heating fuels, everything across the board, that’s a win to the American people.”
U.S. crude oil futures have fallen nearly 14% since Trump took office on Jan. 20. Trump has made energy a central part of his agenda with a focus on increasing oil and gas production. The administration has promised to increase leases on federal lands and waters and expedite the permitting process.
Trump’s tariffs and OPEC policy have been weighing on the oil market in recent weeks as some fear the levies could lead to higher prices and slower economic growth. West Texas Intermediate on March 5 hit an intraday low of $65.22, the lowest since spring 2022, after Trump imposed 25% tariffs on Canada and Mexico. The president subsequently exempted goods that are compliant with the trade pact that governs North America until April 2.
Chevron CEO Mike Wirth and ConocoPhillips CEO Ryan Lance said at an energy conference in Houston last week that they expect U.S. oil production to plateau in the coming years after hitting new records under the Biden administration. Wirth said Chevron is more focused on capital discipline than growing production.
“Chasing growth for growth’s sake has not proven to be particularly successful for our industry,” Wirth said at the CERAWeek by S&P Global Conference. “At some point, you’ve grown enough that you should start to move towards a plateau, and you should generate more free cash flow, rather than just more barrels.”
OPEC+ is also planning to start increasing production in April, gradually bringing back 2.2 million barrels per day to a market that is facing oversupply.
Trump, Wright and Interior Secretary Doug Burgum met with oil and gas executives on Wednesday at the White House. Wright said the administration’s first message was that they intend to work closely with the industry. They no longer have a “scarlet letter on their forehead,” Wright said.
U.S. crude oil prices have risen modestly in recent days as Trump has launched airstrikes on the Houthis in Yemen and vowed to hold Iran responsible for any future attacks by the militant group. West Texas Intermediate was trading at $67.11 per barrel Thursday morning.
Iran is an OPEC member and any escalation in tensions with the country raises fears of supply disruptions. Trump is aiming to drive Iran’s oil exports to zero in an effort to push the Islamic Republic to negotiate a nuclear deal.