Oil industry that Trump wants to ‘drill, baby, drill’ has taken a beating since he took office
An operator for Baker Hughes conducts a wireline survey on a Chesapeake Energy natural gas rig in the North Texas Barnett Shale near Burleson, Texas.
Matt Nager | Getty Images
President Donald Trump wants the oil and gas industry to “drill, baby, drill” in pursuit of his energy dominance agenda, but the companies involved in the actual drilling and servicing of wells have instead taken a beating during his first 100 days in office.
U.S. crude oil prices have fallen below $65 per barrel, down more than 20% since Trump’s second term began, making it unprofitable for many companies to boost production, according to a survey by the Federal Reserve Bank of Dallas.
Executives on the frontline of the U.S. shale oil boom were scathing in their criticism of Trump’s policies in anonymous responses to that same survey. They used the word “uncertainty” in their comments more than in any quarter since the start of the Covid-19 pandemic five years ago, according to Mason Hamilton, vice president of economics and research at the American Petroleum Institute.
Oilfield service firms Baker Hughes, Halliburton and SLB are warning that investment in exploration, drilling and production will slow this year due to falling oil prices. Shares of Baker Hughes and SLB are down more than 20% since Trump’s inauguration while Halliburton has slumped 32%.
The S&P 500 energy sector has fallen more than 11% since Jan. 20, more than the broader market’s decline of nearly 8%.
SLB CEO Olivier Le Peuch told investors last week that Trump’s tariffs are causing economic uncertainty that could hurt demand, while the group of producers known as OPEC+ is accelerating supply faster than originally anticipated.
“In this environment, commodity prices are challenged and until they stabilize, customers are likely to take a more cautious approach to near-term activity and discretionary spending,” Le Peuch said last week on SLB’s first-quarter earnings call with analysts and investors.
Less drilling
The North American petroleum market faces more downside risk than the rest of the world because onshore oil production in the U.S. is more sensitive to commodity prices, the SLB CEO said.
Baker Hughes forecasts global upstream investment in exploration and production will decline by high-single digits this year compared to 2024, with spending in North America falling by low double digits, CEO Lorenzo Simonelli told investors on its earnings call, also last week.
“The prospects of an oversupplied oil market, rising tariffs, uncertainty in Mexico and activity weakness in Saudi Arabia are collectively constraining international upstream spending levels,” Simonelli said.
But the situation is fluid, with little visibility into what the second half of the year will bring, especially for more economically-sensitive activities such as drilling and completion of wells, the Baker Hughes chief said. There’s even a risk that the outlook could deteriorate further, he said.
“These expectations assume a stabilization of oil prices around the current levels and [that] tariffs hold at the current 90-day pause rates,” Simonelli said. “A sustained move lower in oil prices or worsening tariffs would introduce further downside risk to this outlook.”
For his part, Halliburton CEO Jeffrey Miller said customers are “evaluating their activity scenarios and plans for 2025.” Miller warned on Halliburton’s recent earnings call that a reduction in activity could result in “higher-than-normal whitespace,” referring to periods when equipment is not being used.
SLB expects revenue to be flat or grow by mid-single digits in the second half of the year. Baker Hughes sees a tariff impact of $100 to $200 million to its earnings before interest, tax, depreciation and amortization, assuming tariff rates don’t increase further this year. Halliburton is forecasting that trade tensions will hit its earnings by 2 to 3 cents per share in the second quarter.
Energy secretary promises ‘clarity’
Drilling contractor Patterson-UTI Energy also sees an uncertain outlook, though activity levels haven’t been affected yet, CEO William Hendricks said on the company’s earnings call last Thursday. Patterson-UTI’s stock has tumbled about 35% since Trump came to office.
“If oil prices remain near current levels for an extended period, we could see some of our customers reevaluate their plans,” Hendricks said. The CEO said exploration and production companies are waiting to see if oil prices bounce back to the upper-$60-per-barrel range.
“In the lower-60s, we could see some softening if it stays in there,” Hendricks said. “Certainly, there would be some E&Ps that make some decisions to reduce their budgets. But even in the low-60s, I wouldn’t expect a drastic response from the customer base that we work for,” he said.
U.S. Energy Secretary Chris Wright acknowledged to oil and gas executives at a conference in Oklahoma City last week that there is “a lot of anxiety and uncertainty” in the industry right now.
“That’ll be gone in a few weeks. Maybe it’s a few months, but I think in a few weeks we’ll get some clarity on that,” Wright said, defending Trump’s trade policy. The oilfield services provider that Wright founded, Liberty Energy, has swooned nearly 46% since Trump’s inauguration.
Wright argued at the Oklahoma conference that U.S. reindustrialization as a result of Trump’s trade policy will ultimately boost energy demand. In an interview with CNBC on Monday, the energy secretary said he does not expect U.S. oil production to drop meaningfully.
“Our administration, we don’t have any impact on the short-term movement of oil prices or any price for that matter,” Wright told CNBC’s Brian Sullivan. “We are trying to do everything we can to lower the cost to produce a barrel of oil,” he said, pointing to Trump’s efforts to slash regulations and speed permitting.
Tesla’s India plans won’t include electric vehicle manufacturing, according to the local minister of industries, and the reason is quite simple.
Tesla has been trying to enter the Indian automotive market for years, but it has been unable to circumvent the country’s protectionist efforts, which include high import duties on foreign vehicles.
There have been several false starts in the country. CEO Elon Musk has stated on several occasions that Tesla is actively trying to enter the market.
For the last five years, it seemed that the American automaker was on the verge of entering the Indian market with local hires and even vehicle validation, but it never materialized.
Over the past few months, a new initiative has been underway, and it has shown promise.
It came after India finally reached a compromise on its import duties on cars last year, opening the door for Tesla and other EV automakers to launch in the country.
The deal involves significantly reducing import duties for a limited number of electric vehicles, provided the automaker makes a substantial investment and commitment to establish an electric vehicle factory in India within the coming years.
Since then, Tesla has started hiring service and sales staff, and there have been several reports that the automaker is closing in on some retail and service locations.
However, we now learn that Tesla doesn’t plan to take advantage of the deal, which includes establishing local vehicle manufacturing.
HD Kumaraswamy, India’s Ministry of Heavy Industries, announced that Tesla won’t be one of the automakers planning to build EV factories in the country (via BBC):
“Mercedes Benz, Skoda-Volkswagen, Hyundai and Kia have shown interest [in manufacturing electric cars in India]. Tesla – we are not expecting from them.”
Another Indian government official added that while Tesla participated in the first round of discussions with stakeholders, it stopped participating in the process after, while the previously mentioned automakers continued.
Kumaraswamy still said that he believes Tesla plans to open “two showrooms” in the country, but it’s not clear how it plans to handle the situation with the import duties.
Tesla also faced another recent setback in India when it lost its head of the country last month.
Electrek’s Take
I said it several times in the last few months amid Tesla’s latest effort to enter India, but I’ll repeat it: I’ll believe it when I see it.
We have been burned too many times on this.
Showrooms are one thing, but Tesla also needs to deploy service and charging stations. If its vehicles are still subject to steep import duties without the benefits of the promise of a manufacturing investment, it’s going to be a tough market for Tesla.
The primary reason Tesla is not committing to a manufacturing facility in India is likely due to its factories currently operating at approximately 60% capacity.
It makes no sense to invest in more manufacturing capacity if you are not already utilizing your current fully deployed capacity. That’s also why Tesla halted its Gigafactory Mexico project, along with the US tariffs.
Tesla currently has a demand problem. Not a production capacity demand.
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A leaked recording of a new Tesla training program reveals that the company is concerned about a growing employee morale issue.
Last year, we noted that, following a mass wave of layoffs that was poorly handled on many levels, Tesla has been facing significant employee morale issues.
A year later, it looks like these are ongoing and Tesla is trying to address them.
Last week, Tesla had a week-long production shutdown at Gigafactory Texas and employees were offered to come in for some training during that time.
One of the training sessions was related to “company culture,” and Business Insider obtained a recording, releasing some quotes from it.
The instructor asked Tesla employees attending the training if they’d ever felt “I can’t work under these conditions”or had felt set back by constant change at the company.” “I know I have,” the instructor told the employees.
The recording made it clear that Tesla is having some turnover issues due to morale. The instructor said:
“A lot of people leave this company, and they have kind of a negative taste in their mouth. They think: ‘Man, it was terrible. It was bad. I got burnt out. I feel like I didn’t get anything done, nobody listened to me.’”
The company culture training reportedly used to be for Tesla management, but the instructor said that the company decided to expand it to all employees.
They added:
“Leadership has kind of another level of responsibility for trying to guide and direct that culture. But at the end of the day, it’s us as the people on the ground that are the reflection of the culture.”
The instructor highlighted the need for employees to focus on Tesla’s “higher purpose.”
Tesla greatly benefited from being a mission-driven company with the aim. of accelerating the transition to electric transport and sustainable energy.
It helped with hiring and in pushing Tesla’s well-known aggressive work rate.
However, Tesla’s mission shifted in the last few years as CEO Elon Musk had Tesla focus on autonomous driving, and many people feel that the original mission has taken a step back with the CEO backing Donald Trump and the Republican party, who have historically campaigned against electric vehicles and renewable energy.
Electrek’s Take
Company culture begins at the top and flows down. Musk has historically asked a lot out of Tesla employees, but he has barely been working at Tesla for the past year.
That’s not outstanding leadership.
Furthermore, he alienated most of Tesla’s customer base, and while he still has loyalists at Tesla, I think that his massive drop in favorability is also reflected among Tesla employees.
I think talent retention should be one of the biggest concerns at Tesla right now.
I track employee comings and goings closely and I see a continued exodus of talent right now that doesn’t seem to be slowing down. Employee morale is part of it.
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Anna Barclay | Getty Images
President Donald Trump’s Truth Social platform moved a step closer to having a bitcoin exchange-traded fund available to everyday investors.
NYSE Arca, the all-electronic arm of the New York Stock Exchange that handles most ETF trading, filed on Tuesday to list a bitcoin fund linked to the president’s media company, the latest sign of Trump’s expanding push into the crypto world. Known as a 19b-4 form, the filing is required before regulators can decide whether to allow the fund to launch and trade on a U.S. exchange.
Called the Truth Social Bitcoin ETF, the fund is designed to track the price of bitcoin and offer a simpler way for investors to gain exposure without holding the asset directly. The filing follows an announced partnership between Trump Media and Crypto.com in March to bring a suite of digital asset products to market later this year, pending regulatory approval.
Those planned offerings include baskets of cryptocurrencies, such as bitcoin and Crypto.com’s native Cronos token, combined with traditional securities. The products will be branded under Trump Media and made available to global investors through major brokerage platforms and the Crypto.com app, which serves more than 140 million users worldwide.
Since the January 2024 launch of spot bitcoin ETFs, the market has swelled to more than $130 billion in total assets. BlackRock‘s iShares Bitcoin Trust (IBIT) accounts for the lion’s share, with nearly $69 billion in assets, making it the largest digital asset manager in the world.
Trump is the majority owner of Truth Social’s parent company, Trump Media & Technology Group, which has made a series of crypto-aligned moves in recent months — from trademarking digital asset products to unveiling a $2.5 billion bitcoin treasury plan last week in Las Vegas. If approved, the ETF would represent one of the most politically connected entries into the booming market for bitcoin funds.
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