Trump’s energy dominance push helped by Gulf oil output revival

Key Points

  • US oil production is expected to increase in 2023 and 2024, with significant growth from the Gulf of Mexico, contributing 300,000 barrels of new daily output this year and 250,000 next year.
  • The Gulf's resurgence contrasts with declining shale production due to falling crude prices, with major projects by Chevron, Shell, and BP driving output despite shale cutbacks.
  • Innovations in offshore technology and cost reduction, such as simpler structures and tiebacks to existing platforms, have made Gulf projects more resilient to low oil prices.
  • Challenges remain as the Gulf lacks major new discoveries since 2017, though technological advancements are unlocking difficult reserves like Chevron’s high-pressure Anchor field.
  • Trump’s policies and the National Energy Dominance Council aim to boost US oil production, particularly in the Gulf, despite global trade and OPEC+ pressures impacting prices.

Summary

US oil production is set to grow in 2023 and 2024, driven unexpectedly by the Gulf of Mexico rather than shale, as crude prices decline. The Gulf, dubbed the "Gulf of America" by President Trump, will add 300,000 barrels of daily output this year and 250,000 next year, accounting for significant portions of US growth, according to Wood Mackenzie. This marks a revival for the region, previously overshadowed by shale booms and setbacks like the Deepwater Horizon spill. While shale drillers cut back due to low prices, major Gulf projects by Chevron, Shell, and BP are coming online, bolstered by cost-effective innovations like simpler designs and tiebacks to existing platforms. Chevron’s production is set to rise 50% by 2026, while Shell and BP plan significant expansions. Trump’s administration supports this growth through policies and a new National Energy Dominance Council, though global trade tensions and OPEC+ supply increases challenge price stability. Despite technological advances unlocking tough reserves, the Gulf faces limits with no major discoveries since 2017, raising questions about long-term sustainability.

yahoo
June 10, 2025
Stocks
Read article

Related news