President Donald Trump is urging oil producers to “drill, baby, drill.” U.S. oil and gas investors may not be on board with the plan.
“Right now, with low oil prices, I think we’re going to start to see a lot of companies starting to pare back on their capital spending,” said Clark Williams-Derry, an energy finance analyst at the Institute for Energy Economics and Financial Analysis.
The U.S. is already producing more crude oil than any other nation in history. In December 2024, U.S. oil and gas firms produced more than 13.49 million barrels of crude per day. That’s an all-time high rate of production, according to U.S. Energy Information Administration records.
High rates of production tend to lower prices, which benefits consumers. But if prices drop too far, affecting producers’ profits, they may stop drilling.
Most Americans see oil prices reflected in the price they pay per gallon at gas stations. The retail price of gasoline fluctuates based on seasonal trends and other factors. On March 24, 2025, the nationwide average price of regular unleaded gasoline was about $3.10 per gallon, according to GasBuddy data. That is far below the highest-ever nationwide average price of over $5 per gallon, in June 2022, according to GasBuddy data.
U.S. gasoline prices are expected to fall by 11 cents in 2025 and 19 cents in 2026, according to U.S. Energy Information Administration forecasts.
According to the EIA, crude oil prices in the U.S. accounted for about 52.6% of the average retail price of gasoline in 2023, the most recent data available.
The future trajectory of crude oil prices is a key concern for investors in the oil and gas industry.
On March 24, 2025, the spot price of the U.S. benchmark for crude oil, West Texas Intermediate, was hovering below $70 a barrel. Analysts at S&P Global Commodity Insights expect WTI to average $66 per barrel in 2025.
Crude oil prices, January 2025 to today.
Lower prices for oil affect the profitability of oil and gas businesses, which must sell on global markets.
Producers surveyed by the Federal Reserve Bank of Dallas in March 2024 reported they would need to sell oil at “breakeven” prices of about $64 a barrel in order to make a profit from drilling new wells.
“This is a real challenge to get oil prices at a level that producers are comfortable with, but also that consumers can live with,” said Williams-Derry.
Watch the video above to learn more about Trump’s second-term energy policies