Trump's pick for fracker-in-chief will have a tough time pumping a lot more oil

President-elect Donald Trump aims to achieve lower gas prices, yet the path may be complex. Trump expressed intentions to decrease gas prices, which stand at $3.07 per gallon, to below $2, supported by expanding fracking and drilling. He selected Chris Wright, a strong fracking advocate, as energy secretary. However, despite the booming American oil industry, increased output may not necessarily lead to lower prices. The U.S. leads global oil production, reaching over 13.4 million barrels daily, and could rise slightly by 2025.

While potential production increases might drop the price of West Texas Intermediate oil to below $60 a barrel, OPEC might reduce its output to maintain higher prices or decrease prices to outcompete U.S. producers. This happened previously, causing bankruptcies among U.S. companies when prices were forced down. If oil prices fall too low, it could impede additional shale production.

Trump has highlighted past low prices under his administration, promising increased production to lower costs again. However, in 2020, low gas prices resulted from decreased demand during the pandemic, not just increased production. Significant price drops could again lead to economic drawbacks and production cuts.

Even with robust U.S. energy profits, production may not see a marked increase. After oil prices surged following geopolitical tensions in 2022, oil companies prioritized share buybacks and acquisitions over exploration. An industry expert indicated challenges in significantly elevating production due to already exploited efficient sites. Enhancing U.S. oil output, through increased fracking access, might face limited success due to subdued global demand and economic drivers, particularly from the global push towards clean energy and economic conditions in major markets like China.

Ultimately, U.S. oil production relies more on efficient industry practices than political leadership.