We know by now that Trump is the kind of guy who likes to pick fights. It's one of the few certainties in an otherwise unpredictable administration: at some point Trump will do an all-caps social media post, making threats at allies, enemies and former allies alike.
Sometimes, his threats have helped. Crude prices surged more than 15% in early June as Iran and Israel exchanged missles, and then cooled quickly after Trump brokered a truce. Brent crude, which briefly jumped past $78 per barrel, has now retreated to the $67–$68 range, while WTI crude sits just above $65.
But Trump isn’t taking any chances. Doubling down on trying to get prices down, he posted on Truth Social: “DRILL, BABY, DRILL!!! And I mean now!!!” Energy Secretary Chris Wright responded, “We’re on it!”
In a separate post, he also warned oil producers: “KEEP OIL PRICES DOWN. I’M WATCHING!”
For Trump, crude oil prices are a proxy for economic health. But crude is moody: it is susceptible to regional flare-ups, supply chokepoints and shifting global demand, all of which keeps the oil market on edge. While the clean energy transition is speeding up, oil remains critical, powering nearly a third of global energy use.
Trump dislikes anything that drives energy prices up - he really wants cheap oil.
Trump wants oil prices to go below $50
In the best-case scenario for consumers, oil prices could fall below $50 a barrel. Trump has long favored a $40–$50 price range, a zone he often praises for keeping inflation down and gas prices low.
That looks like a pipe dream, however. US oil executives and analysts say that $50 oil would hurt US producers, especially shale operators, whose costs have risen over the years. Executives in a recent Dallas Fed Energy Survey said their companies need an average price of $65 per barrel to drill a new well profitably.
An Axios report revealed that many US producers are not expanding drilling aggressively unless prices stay well above breakeven. Some companies have already begun cutting capital expenditure for 2025 and 2026 at the current price level.
“You can’t have $50 oil and ‘Drill, Baby, Drill.’ Those two things are incompatible,” said Andy Hendricks, CEO of Patterson-UTI Energy.
Currently, the US leads the world in oil production, accounting for 22.5% of global output.
The US accounts for over a fifth of global crude production
The OPEC+ alliance however, the world's most famous cartel (which includes Middle Eastern producers and non-OPEC members like Russia), produces around 40% of global crude and controls over 70% of proven oil reserves. This lets the bloc essentially control oil prices by coordinating their combined output.
Oil has been trading in the Goldilocks zone - but it's a fragile balance
The balance between supply and demand right now for crude, is pretty delicate. ING’s commodities team warns that any supply shock in the Middle East or disruption in key shipping lanes like the Strait of Hormuz or the Red Sea could quickly add a $10–$20 premium to crude.
On the flip side, weaker Chinese demand or a fresh wave of OPEC+ output could limit any upside.
The Strait of Hormuz, a narrow corridor between Iran and Oman, handles about 20% of global oil and one-third of seaborne flows. Any military escalation here could drive Brent crude past $100, possibly hitting $130, according to JP Morgan. The likelihood of this happening is low in the immediate future, with the Iran-Israel ceasefire.
Chokepoints pose a major threat to global oil prices
Renewable energy gains momentum, but faces new roadblocks
Even as clean energy investments have hit record highs, fossil fuels continue to dominate the global energy mix. As of 2024, they account for around 60% of all energy production, with oil alone providing nearly 30%, according to the Energy Institute. These fuels remain deeply embedded in everything from transportation and manufacturing to heating and power generation.
That said, renewables are quickly gaining ground. Thanks to record investments and strong government support, electricity production from wind and solar has been on a steady rise over the past decade. Together, they now generate nearly 15% of the world’s electricity.
In contrast, traditional sources such as coal, gas, hydro, nuclear, and oil have either plateaued or declined in their share.
Electricity production from solar and wind gains momentum
GlobalData and Deloitte predict that renewables could supply up to 40% of the global energy mix by 2030. But the International Energy Agency remains cautious, projecting a more conservative 20% share by that time.
Analysts highlight that moving from under 20% today to over 40% of global energy supply in just five years would require not only trillions in investment but also massive upgrades to power grids, battery storage, EV infrastructure and industrial systems worldwide.
The “One Big, Beautiful Bill” that recently passed and Trump signed however, have shifted energy policy away from renewables. Trump hates windmills and doesn't like solar, and the new law adds generous tax credits for coal producers, effectively subsidizing the fossil fuel sector. It has also phased out generous tax breaks for wind and solar that are not completed before 2027.
