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Economic Viewpoint

Trump’s Energy Policy: Why “Drill, Baby, Drill” Is a Pipe Dream

February 12, 2025
Marc-Antoine Dumont
Senior Economist

President Trump wants to strengthen US energy dominance by ramping up oil and gas production. He signed executive orders to simplify the permitting process, open up access to federal lands and remove several regulatory barriers. However, the US market is well supplied, and low oil prices are eroding the viability of new drilling operations. Producers favour profitability and returns to investors, which is hindering potential production growth. In addition, the global market is oversupplied, which is keeping prices down. Measures to deregulate the industry and increase access to federal lands will have a limited impact on production in the short term. 

Canada, the largest heavy crude supplier to the United States, may be affected by tariffs, but US refineries depend greatly on this type of oil. Tariffs could increase gasoline prices in the United States and Canada. Although Trump has big plans for the US oil industry, market headwinds and dependence on Canadian oil are limiting the impact of his policies. “Drill, baby, drill” will likely remain a pipe dream.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.