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.
