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U.S. President Trump wants more drilling, but the oil market is already saturated with hundreds of idle oil leases sitting untapped in the Gulf of Mexico (grist.org)

submitted 1 week ago by [email protected] to c/[email protected]

35 comments fedilink hide all child comments

...

Of the 2,206 active leases in the Gulf of Mexico, only a fifth are producing oil, according to records from the Bureau of Ocean Energy Management, which regulates offshore drilling. Oil industry executives and analysts say the current number of 448 oil-producing leases is unlikely to grow significantly, even if Trump makes good on promises to expand leasing opportunities and expedite drilling permits.

The market is saturated with oil, making companies reluctant to spend more money drilling because the added product will likely push prices down, cutting into profits.

“It’s not the regulations that are getting in the way, it’s the economics,” said Hugh Daigle, a professor of petroleum engineering at the University of Texas in Austin. “It’s true that there are a bunch of undeveloped leases in the Gulf, and it’ll stay that way if we continue to see low or stagnant oil prices.”

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[–] [email protected] 25 points 6 days ago* (last edited 6 days ago) (5 children)

This is something that never made sense to me. The US is already a net exporter for oil (dunno if refined or whatever) but the economy is not limited by fossil fuel availability.

Other nations are trying to move away from oil, especial China which was a huge market for ICE cars to until recently.

Also, you'd be insane to rely on the US for essential goods for the next 4 years and possibly beyond. So you have a commodity that is seeing less international use in its prime market, a supply larger than demand, and yet ask other nations to lower the price which in turn makes your product less desirable or profitable (https://www.reuters.com/business/energy/opec-yet-react-trump-call-lower-oil-prices-2025-01-24/) while proving you're a terrible partner.

Meanwhile, Trump ran on increasing production. It makes no sense.

What is the end goal here? Can someone explain?

[–] [email protected] 13 points 6 days ago

Trump is a bad business man who doesn't understand economics

[–] [email protected] 11 points 6 days ago (1 children)

Trump is an idiot who doesn't know what he's doing, his supporters are equally stupid and were told that we weren't drilling almost any oil and believed it implicitly. Therefore Trump has to drill more oil. Because more oil good

[–] [email protected] 3 points 6 days ago (1 children)

TRUMP is an idiot. Unfortunately his handlers are not.

[–] [email protected] 3 points 5 days ago* (last edited 5 days ago)

In the end they are too. Just because they have played through capitalism, live in surreal wealth, implement elaborate plans to play through new game plus of capitalism, they still fail to find the most fun and rewarding play through: The no-kill, stealth, co-op play through.

They are part of humanity but destroy the base of their existence. Where is that not idiotic?

[–] [email protected] 5 points 6 days ago* (last edited 6 days ago)

Strategic reserves for when he starts the war he wants. Germany lost because they ran out of oil and steel so expect an announcement that Bethlehem steel is bought by one of his lackies or absorbed by the fed as a national security measure.

[–] [email protected] 7 points 6 days ago

All the rural voters need to know about economics is that the guys who work in oil make big bucks. They drive big trucks so you can tell.

They think drilling more oil means everybody get big truck.

[–] [email protected] 5 points 6 days ago

also most us oil is not the type our refineries are equiped to refine.

[–] [email protected] 20 points 6 days ago (2 children)

it’ll stay that way if we continue to see low or stagnant oil prices.

The 90s kid in me who watched my parents absolutely losing their shit over $1.20/gallon gas in ~2003 is fucking bamboozled by this statement.

[–] [email protected] 4 points 6 days ago

Just to add some context, inflation would make that $2.05 per gallon today.

[–] [email protected] 1 points 6 days ago

I got my license in 1997 and gas was 98 cents/gallon

[–] [email protected] 15 points 6 days ago (1 children)

You mean the Gulf of America? Does that mean the leases are void now?

[–] phoenixz 2 points 6 days ago

No, that doesn't exist.

[–] [email protected] 11 points 6 days ago

I literally just left the pump and was like "hm, gas went up again?".

Guess I know why now.

[–] [email protected] 6 points 6 days ago

Well yeah, considering the exponential growth of renewable energy installations, fossil fuel consumption might drop to close to zero in 2040, and since oil fields typically have a lifetime of ~20 years, fossil fuel companies have less and less of an economic incentive to invest into the exploration of new oil fields.

[–] [email protected] 10 points 6 days ago (1 children)

Does he understand that that will drive the cost down?

[–] [email protected] 9 points 6 days ago

[–] [email protected] 37 points 1 week ago* (last edited 1 week ago) (3 children)

Gulf of Mexico

worth repeating every time until the message is crystal clear

(looking at you Google you absolute boot licking assholes)

[–] [email protected] 5 points 6 days ago (1 children)

At least they designated America as a sensitive country. I find that funny.

Tbh, it's not Googles place to take sides in border disputes.
The mockery and criticism should be directed at the US government. Google is doing what they have always done.

[–] [email protected] 5 points 6 days ago* (last edited 6 days ago)

i don’t necessarily disagree with how they’ve chosen to proceed in the US: personally, on this single issue ignoring all others I probably wouldn’t make the same decision but i don’t think it’s cut and dry (for Google)

what i think is completely fucked is they’ve stated they’re making the change for the entire world (last time i heard)… fuck you google: the world isn’t ruled by the US government… we, unlike the US, tend to follow global standards: metric, borders, place names… we have organisations that determine those. we don’t want to be part of the US (hi canada, hi greenland), we don’t want to follow you everywhere

[–] [email protected] 3 points 6 days ago

When does that go into effect?

[–] [email protected] 26 points 1 week ago (1 children)

He only likes drilling because as a rapist he gets off on violent penetrations.

[–] [email protected] 4 points 1 week ago

So we should start calling him “orange duck” now?

[–] [email protected] 25 points 1 week ago (3 children)

From the article, it doesn't sound like the market is saturated with oil at all. If the oil companies are afraid that more drilling will drive prices down, it sure seems like they're colluding to restrict the amount of oil in the market so they have some cover for their price fixing. That said, the focus should really be on switching to renewables, but that won't be happening anytime soon.

[–] [email protected] 10 points 6 days ago

it sure seems like they’re colluding to restrict the amount of oil in the market so they have some cover for their price fixing.

They absolutely are.

[–] [email protected] 6 points 6 days ago (1 children)

If the market is saturated with oil, oil prices go negative. Its happened before.

[–] [email protected] 5 points 6 days ago

It happened less than 5 years ago even. It was funny.

[–] [email protected] 25 points 1 week ago (2 children)

it sure seems like they’re colluding to restrict the amount of oil in the market

Um....

Yes? 100% always has been, they literally have meetings and what is essentially a corporate union specifically to do it. And they're not subtle about it.

Is this really news to some people?

[–] [email protected] 8 points 1 week ago

It's not news to me, but it sure seems to be news to the article author, given the way it's presented.

[–] [email protected] 8 points 1 week ago

They want to keep oil prices around $80 a barrel (in general). It's the "sweet spot" for profitability and gas prices essentially...

[–] [email protected] 16 points 1 week ago (1 children)

His supporters don't know that though. Fox News doesn't report that part.

[–] lost_faith 6 points 6 days ago* (last edited 6 days ago)

Fox Entertainment doesn't post all the facts? Colour me shocked

[–] [email protected] 1 points 1 week ago (1 children)

Not if say Russia is taken out of the global oil market, which looks rather likely.

[–] [email protected] 2 points 6 days ago (1 children)

It's not. Russia will continue to sell oil through India and China.

Though if prices go too low, Russia's oil goes unprofitable before e.g Saudi oil. Trump could accidentally put the squeeze on Putin by drilling more oil lol

[–] [email protected] 2 points 6 days ago

Most of Russias oil exports go through ports in the European part of Russia. Those are currently being attacked by Ukraine. For example Ukraine managed to hit an oil pumping station shutting down the oil port of Ust-Luga, which handles 20% of Russian oil exports.