Let’s discuss Trump’s hugely conflicting energy goals. 
Please consider the Baker Hughes Rig Count for August 8, 2025.
The Baker Hughes Rig Counts are an important business barometer for the drilling industry and its suppliers. When drilling rigs are active they consume products and services produced by the oil service industry. The active rig count acts as a leading indicator of demand for products used in drilling, completing, producing and processing hydrocarbons.
The count tracks the number of active drilling rigs in operation, regardless of whether they are used to extract oil, natural gas, or both. It is a key indicator of activity in the oil and gas industry.
Making Black Gold Less Golden
Eurointelligence has some interesting comments on Making Black Gold Less Golden
Saying that you should judge someone by their actions and not their words is a cliché, but one that is largely true. It applies to Donald Trump doubly so. Since taking office again earlier this year, his energy policy has had two irreconcilable goals: raise US oil and gas drilling, and lower oil prices.
If you look at what’s happening in practice, the latter is clearly happening at the expense of the former. Brent crude prices are down by about $10 per barrel on the year to date, and were just above $65 a barrel as of last Friday. West Texas Intermediate oil is a bit lower than that, at just above $63 a barrel.
This has not been great for the US’s own oil industry. Such low prices disincentivise more drilling, since they bring what producers can fetch close to their break-even rates for actually making a profit. Earlier this year, a survey from the Dallas Fed produced a $65 a barrel breakeven estimate for Texas’s Permian Basin, one of the major shale oil-producing regions in the US. According to the latest oil rig count survey from US energy servicing firm Baker Hughes, the number of active oil and gas drilling rigs in the country dropped again, 14 times in 15 weeks. It is down by 8% year-on-year too.
One of the reasons for these low prices is the uncertainty that Trump’s various tariff threats have produced. But another is a successive series of large supply increases from OPEC+. The multinational cartel dialed up another earlier this month, saying it will raise output in September by 547,000 barrels per day. This will complete its efforts to unwind an earlier series of production cuts worth 2.2m barrels per day. It’s also worth noting that turning on the taps was something Trump actually asked OPEC to do as well, earlier this year.
Conflicting Goals
Trump simultaneously needs higher prices for more drilling but lower energy prices to meet his boasts on lowering gasoline prices.
I was discussing this setup with a friend the other day. He believes the EU can meet non-binding promises to purchase more US energy via more drilling.
Not at these prices. And “Drill Baby Brill” would suppress prices.
Trump Announces a 15 Percent Tariff Deal With the EU But There Is No Deal
On July 27, I commented Trump Announces a 15 Percent Tariff Deal With the EU But There Is No Deal
Trump said the EU will invest $600 billion in the U.S. and buy $750 billion of U.S. energy, with “vast amounts” of American weapons also in the mix. He also said the EU will be “opening up their countries at zero tariff.”
Yeah right.
For starters, Ursula von der Leyden has no signing authority. She is chief negotiator but any deal has to be signed by the European Parliament.
Second, energy trade is not with the EU. Trade is between individuals not nations or in this case a block of 27 nations.
There is no way the EU can tell companies in 27 different countries who they buy energy from.
Who is going to force some German importer to buy more US cars? More LNG? More anything?
China Halts US Liquid Natural Gas Imports, Turns to Russia Instead
On April 21, I noted China Halts US Liquid Natural Gas Imports, Turns to Russia Instead
The US is building expensive terminals to export LNG. Now what?
“I do not think Chinese LNG importers will ever contract any new US LNG,” Anne-Sophie Corbeau, a gas specialist at Columbia University’s Center on Global Energy Policy, told FT.
Chinese traders have grown cold towards new long-term commitments for future supply from the United States, instead seeking long-term deals with gas producers in the Middle East and the Asia Pacific.
AI Overview of EU LNG Needs
The European Union has significantly increased its LNG import capacity in recent years to reduce dependence on Russian gas, particularly from the US. However, whether it can handle substantially more US LNG is complex and faces several challenges:
- Infrastructure capacity:
- The EU’s total LNG import capacity is around 250 billion cubic meters per year, more than double its current annual LNG imports. This suggests there is theoretically enough capacity to handle more LNG imports.
- However, bottlenecks and infrastructure limitations still exist in certain regions, potentially impacting efficient distribution.
- Demand and Supply Dynamics:
- Despite the push for US LNG, Europe’s gas demand is expected to decline in the coming years as it shifts towards cleaner energy sources to meet climate targets.
- The US is already a major LNG supplier to the EU, but the ability to significantly increase supply depends on the pace of new liquefaction plant development in the US and global market dynamics.
- Competition for LNG from other global markets, especially Asia, could also impact the availability and price of US LNG for Europe.
- Commercial and Contractual Considerations:
- Individual European energy companies, rather than the EU as a whole, make commercial decisions about LNG purchases and contracts.
- Many EU utilities are hesitant to sign long-term US LNG contracts due to declining gas demand forecasts and potential exposure to fluctuating global prices.
Read those last two hollow bullet points on contractual considerations carefully.
Add to those points Trump’s propensity to demand changes to any deal he makes.
EU AI Conclusion
While the EU has some spare capacity to import more US LNG, the extent to which it can absorb substantial increases is questionable due to declining gas demand, competition from other markets, potential reluctance from European companies to sign long-term contracts, and ongoing regulatory and geopolitical complexities.
What Happened?
Ursula von der Leyden told Trump what he wanted to hear. It’s nonbinding BS from multiple angles.
If prices get high enough the US will add more rigs.
But US drillers are not going to add more rigs at these prices. The Baker Hughes rig counts are all the proof you need.
All of these alleged “deals” are in the same non-binding category.
The smart negotiators tell Trump how brilliant he is and how much energy they will buy.
It’s all total bullsheet.
Low price oil? slow up supply.
High price oil? keep inventories steady
Works in all in all industries.
Come on Mish
Our former ally Canada has opened its first LNG export facility and all of the cargo for the next 20 years is contracted to China. They are rushing to double capacity and China has stated that it will take all of that as well. Canada is now building an additional crude oil pipeline to the west coast for exports to China.
Trump has alienated both nations and China is rejecting some US LNG cargoes.
China will not be signing new contracts to import LNG from the US. Yet the US companies have committed huge amounts of capital for building LNG export facilities.
There are already permitted plans to bring our export capacity to 43 Billion Cu Ft per day (currently about 18 billion per day).
With Russia and Canada taking China as a customer, and Trump being a Putin pawn the US exporters are now cut off from the largest importer of LNG on the planet! Trump has made a grave error in starting this trade war.
The world is going to tell Trump to “stuff it”.
Who does Trump work for? Oh, I recall, it’s Vlad the impaler, Trumps going to meet him soon in Alaska with his big brown nose.
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OH boy, The Putin angst… The fact that all of the leftist liberal’s so hate a
white Christian country and back NEO-Fascist Canada; who has very little
respect for their fly over country citizens, and China, well we all know how they fly.
What the heck is wrong with you people?
Europe would rather support dictators than buy more expensive fuel.
Drill baby drill is a standard troupe for republicans to rally their base. While everyone is actually moving to renewables.
Renewable’s ??? Ha ha Ask some of the east cost peeps who are paying $800.00
to $ 1,000.00 per month for home electric because of GREEN Policy’s
IF they will Vote Blue ever again…………….
The day of the election gas was $2.96 in my market. Today it is $3.39!
UP 45 cents!
The tariffs on Canadian oil are directly responsible for the increase because the midwestern refineries can only refine this heavy crude.
All of my farming friends are paying 15% higher fuel prices thanks to Trumps tariffs.
Any questions from the MAGA sheeple?
Trump is a lying idiot and a pedophile!
Fire his ass!
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they’re making up the numbers to make Trump look bad!! CEO of Baker Hughes needs to go!
/sarcasm.
90 deals in 90 days.
Original 90 days (by ~July 9): Only 2 deals (UK and Vietnam) were completed.
Will I be fired?
That title is in the back room of a closed 1980s VHS rental store.
I’m willing to bet it’s actually in the Epstein files.
Lots to untangle here.
Yes. Trump wants to “drill baby drill”. As recently as June he even claimed “the US is drilling like it never has before!”
A typical Trump lie.
Drilling activity has been declining for the last year as oil prices declined. Which is normal and expected. Oil companies are reluctant to drill when they cannot make a profit. As Mish pointed out, breakevens for new wells are around $65 and WTI prices are at $63.
US Companies are instead focusing on squeezing as much as possible out of existing wells. Each drill rig is drilling much longer laterals. These longer laterals plus optimization of fracking techniques has led to more production per well, though less production per foot drilled. Which is one of the reasons production has maintained around 13.4 mbpd while drill rig counts have dropped.
In addition breakeven costs are rising. One reason is tariffs on consumables like steel, pipes, pumps, frack sand etc. are raising costs. Water disposal costs are also rising and water disposal itself is becoming a limiting issue. Another issue is that we are running out of our best drilling locations (tier one inventory) and we are beginning to drill more costly tier two inventory.
Of the 13.4 mbpd that the US produces, roughly 3 mbpd is conventional slow decline heavy oil and 10.4 mbpd is high decline light shale oil. We need roughly 440 oil drill rigs operating to maintain that high decline shale production. We are now at 410 active oil rigs, which means that shale oil production will begin to decline within the next year if rig counts don’t go back up. And they will only go up with much higher prices.
Prices are down because OPEC brought back an additional 2.2 mbpd of production that they took offline last year. It isn’t because of higher US drilling. US production has remained flat over the last 6 months at 13.4 mbpd.
One of the reasons that the vast majority of my oil and gas investments are in Canadian oil and gas companies is because they have many decades of tier one inventory left to drill, and much lower breakeven costs ($40-$50) compared to US companies.
Regarding LNG. There are currently 5 new LNG facilities under construction in the US, which, when completed, will increase our export capacity from 14 bcf/d to 24 bcf/d by 2028. And we have a lot of natural gas that can be tapped to make this happen.
However, Trump is threatening this expansion by demanding that “some” US LNG be exported on US built and flagged LNG carriers. Which we don’t have. Just another one of those “government mandates” that is impossible to meet. So I expect him to drop this demand.
Still, even with LNG expansion, we cannot meet the levels of energy exports that Trump is claiming with Europe, Japan etc.
What is the EROI on fracking oil. Will longer lateral drills and second tier fields, it cannot be great.
EROI for fracked oil wells range from 5:1 to 10:1. Conventional oil is a much better 20:1.
However, EROI calculations are based on Estimated Ultimate Recovery (EUR) which is sometimes difficult to calculate since fracked wells often decline by 60-70% in the first year. Most fracked wells can produce for 8-10 years, but some are done in 2-3 years.
By comparison there are some conventional wells still producing a barrel or two per day after 100+ years. Which is why we still have over 900,000 active producing wells in the US. 77% of those wells produce an average of just 15 barrels per day.
It may not be that easy with labor leaving the oil patch permanently. Working on a drilling rig is a young man’s game and there just aren’t enough to go around. Do you want ICE agents or rig workers or health care workers for boomers cuz you don’t have enough for all of those roles.
https://www.nytimes.com/2025/01/14/business/energy-environment/oil-gas-jobs.html
Not sure how tariffing India engineers plays into the mix either.
Correct, over 20,000 oil workers have lost their jobs and the steel for casing pipe is now about 50% more expensive. Drilling in the US is simply too expensive.
The all time record for US oil production was during the Biden administration and that is a sad fact.
Trump is selling out to the Saudis & Qatar and Russia is exporting its oil without regard for the sanctions because Trump is Putins bitch.
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Bagdad 112F. Spain and Portugal are burning. Alaska is cool. The E3 and NATO are talking to Trump before he flies to Anchorage. Trump might allow Putin to West Bank Ukraine. France was weaken and depleted. Will Trump and the E3 sell Ukraine. What will SPX do ???
Peace on earth. Kellogg Briand is dead. F**k Hauge international court of justice..
in this neck of woods, wall street, we always knew that the ruling class, or if your will the betters and more well healed, could tell the middlebrows to eat their own shit and they would oblige with grins on their faces and ask for seconds. some things are just plain nasty. see the caste system in india for a phd in this area.
Over the last 12 months, oil is down almost 20%.
Down is down, right?
More of the same acting like we’re supposed to take TACO literally with everything that comes out of his mouth.
That’s not the president we currently have. It’s what we all want, but we could same the same thing about Brandon.
With fewer rigs we produce more oil, in very harsh environment, we couldn’t handle before. Harsh baby. Drill baby drill in harsh environment.
Bullshit!
Oil production is down.
To add to Trumps insults to our economy, we were exporting 125 billion cu ft of LNG per week and now it is down around 112 billion cu ft per week being shipped. Several cargoes were rejected by China and had to find alternative places to offload.
Read the EIA’s website to learn what is going on in the oil patch!
Over 1/2 billion dollars in planned 2025 Cap Ex have been cancelled by US drillers.
Sheesh!
One of many campaign promises in order to get elected with no real intent to deliver. Now, it is th time to become king with no restricted actions.
Hmmm…
What happened to cheap private venture money?
Very educated herd. They know it all about shoes and oil !
Seriously… are you ok? Do you have grandkids we should call to check on you?
the drunken tobacco kings knocked off chaucey, before producing their “Liberal Imperialism”. This 350x 350 little island ruled 80% of the world for 400 years, Churchill didn’t have the skilled to run an empire. The RAF blasted the Kurds in 1920’s. After a 100Y the Brits are back in Mosul for oil, oil baby, oil !!
I think it’s an AI Bot lol. He is always spouting off gibberish.
Some village in up state NY has lost its idiot
Eurointel. A contradiction in terms surely. Like happily married.
On the one hand, I am told (correctly) that nations don’t conduct trade; individuals conduct trade. Today, I’m told that the US Federal government is responsible for the 8% decrease in rig count. Hey, the rig count is set by individual companies making business decisions. The proper role of government is to get out of the way and let market forces make decisions obvious.
Minor point, but someone could tell Eurointelligence that West Texas is in the US.
Instead we get the socialists tariffing oil industry inputs and destroying labor availability.
The amount of oil being produced domestically is up significantly and at all time highs. Less rigs but more oil. Strange.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M
The rest of the story might be wells drilled but not completed. Not sure of the situation now, but a while back the inventory of wells needing completed was very high, completed meaning casing perforated, formation stimulated (hydro fracture treatment), production equipment installed, and well tied into the transport system. Wells moved to completed status add to the producing inventory even though the rig count is down. Other possibilities are response to recently installed enhanced recovery projects like water flooding, increases from well repair operations or upsizing pumping equipment.
Not saying any of these are the case, just pointing out that there are other factors that can cause near term increase in production as rig count declines. Over the long haul, the correlation of increased production to increased well count is valid. Look for the production graph in your link to roll over fairly soon.
In fracked field the cessation of maintenance drilling will lower production, but not instantly. It takes a while for numbers to come down.
Not sure you have an understanding of oil production as your statement does not reflect oil field familiarity. First, fields are not fracture treated, wells are. Second, there is in the business what is known as initial production rate or IP. Without outside influence, that is the highest rate the well will produce, it is down hill from then on unless there are reservoir treatments, enhanced recovery initiated in the field, workovers to repair/stimulate a well, optimizing lift equipment and possibility other measures. The reason is reservoir energy pushes hydrocarbons to the wellbore and as fluids are produced, that energy is diminished. IP is the highest rate a well will produce without some work done to increase the available energy differential favoring flow to the wellbore like a water flood or reducing the resistance to flow into the wellbore such as an acid treatment to remove “skin” or a fracture treatment to increase formation surface area available for fluids to enter the wellbore.
FEWER
The entire point of “drill baby drill” is to lower oil and energy prices. Oil and energy prices are down. Rig counts are not the goal.
Inexpensive energy is essential to prosperity.
If the U.S. and UK Deep State allows Trump to make peace with Russia, Russian oil and gas production could increase and help suppress energy costs.
Deep state, nah, we have the shallowest good for f*ck all establishment on the planet, not a grey cell between the lot. They don’t have the intelligence to engage in the sort of subversive activity you ascribe them. (sadly)
The Derp State.
Actually, MI6 dirty war and false flag attacks are all the UK has left. Watch for a “Russian” attack on civilians in Kharkov before the Trump/Putin meeting in Alaska. I’d put money on MI6 involvement in the Crocus City attack, although Nuland did promise “nasty surprises”. They were almost certainly behind (along with the Banderistas) the Bucha false flag that happened at the very moment BoJo was dispatched to Istanbul in April 2022 to scuttle the peace agreement that Ukraine and Russia had all but agreed to.
No. That’s what Trump said, but what big oil wants to do is expand their businesses by selling more US oil and LNG overseas. It’s not for us. And Trump is pressuring trading partners to buy the oil you thought he was going to sell to you for less. Less is bad for oil companies.
Big Wind is not going to like this…
Interest rates up, cost of materials up, price of oil down, I see nothing surprising.
10 Year yield today is 4.24. In January yields were higher (about 4.60. Interest rates have declined.
You just don’t see how Trump is responsible? Me, neither.
I changed my mind last night after hearing David Roseburg in a podcast: “All that matters to Trump is his legacy..” In so many words.
Thus, everything he does is in that context: “I want to be feared and taken seriously (TACO element, standing in the way.). 2) I do NOT want inflation. 3) I want to intimidate the FED to dump interest rates. 4) I want to be known as the TAXES DOWN President. (NOPE, tariffs are a tax ON US!). 5) I want to be known as the PEACE PRESIDENT (We shall see). 6) I want to be known as the BEST negotiator known in history of Presidents.
TACO undoes that Negotiation factor. HE HAS STAYING power for sure, but I also think that he is losing his edge with the lack of TRUTH he spews on MANY OF US who hope for the best but know that he may well be the biggest bullshitter since Biden.
He the biggest BS’er since the last biggest BS’er. In fact Im sure he’s one of a line of big BS’ers.
Donald Trump is just your crazy uncle Jack who likes to sit around the Thanksgiving dinner table and spew whatever nonsense comes into his head, expecting everyone to agree and tell him how smart he is.
Trump sold out to the Saudis and Qatar for a shitty 747 for himself…
Trump gets gets toys ~ they get to increase their market share and sell oil at a floor of $60 per barrel. Our drillers have stopped drilling and reduces CapEx dramatically because they can not make a profit around $60 per barrel.
Meanwhile Russia ignores the sanctions and ships oil like crazy right under Trumps nose. Putin own’s Trump!
This is why he is at war with EV’s and tariffing copper at 50%. He wants us to be dependent on big oil.
Welcome to the Dark Ages of Trump! You thought his first term and Covid were bad?
Just wait for his encore!
send me blueberries !
On the count of three, everyone move to SoCal to save energy, …
Why don’t you get a real job ?
US could have replaced China with selling into the Indian market. However Presidents Trump’s tariff policy has almost closed the Indian market to US LNG or Oil.
Oil companies are racing to get ahead of the shrinking US economy is one possibility. The other possibility is advances in drilling technology are allowing them to do more with fewer rigs. It’s likely a combination of both. The irony is the drill baby drill King of all Presidents, for the time being, is going to be Joe Biden.
Welcome to the dystrumpian future of US politics. Please don’t export it, with or without Bessant’s export tax.
If i recall there were two recent articles about groundwater pollution from fracking and more earthquakes from the same where previously they had been virtually nonexistent.
Arctic has been opened but it takes a while to establish infrastructure plus the big moves are underwater Arctic oil and gas and eventually mineral deposits.
From ZH ( Earthquake stuff can be Googled and go back at least to 2011)
Texas Warns Wastewater Injection Threatens Permian Oil ReservesThe Permian’s Dirty “Wastewater” Secret Is Bubbling OverPeak Permian? Geology And Water Say We’re CloseShale Giant Diamondback Slashes CapEx Again Ahead Of Crude Supply FloodChevron Nears Peak Permian Production, Shifting From Growth to “Billions” In Cash FlowOil War Makes Landfall: Permian Rigs, Crew Counts Crater As Oil Prices Plunge, And It’s About To Get Much Worse…
All of the above was obvious to all but an idiot but well, Orangeman. The LNG thing under Biden – who smartly decided to pause further expansion – is clearly a driving force as Trump will do exactly the opposite of anything Biden or Obama did (or wanted to do)
HUH? Gas and oil permitting, production and LNG export expansion was massive under Biden…
So much so that the Permian Basin is hitting peak production this year! We can not produce enough LNG to fill the already permitted export facilities.
Follow the EIA website and pay attention to the oil markets people.
For 14 weeks in a row rig counts have fallen despite Trumps lies!
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