Article – The oil industry faces significant economic challenges but continues to align strongly with former President Donald Trump as the 2024 election approaches. Despite financial headwinds including disappointing earnings, layoffs, and market volatility, major industry players see a potential second Trump administration as their best path forward amid growing regulatory pressure.
Recent earnings reports reveal a troubling picture for oil majors. ExxonMobil reported a 28% drop in quarterly profit while Chevron saw earnings fall by 16% compared to last year, according to recent SEC filings. ConocoPhillips similarly disappointed investors with results well below Wall Street expectations. These financial struggles come amid crude oil price volatility, with WTI hovering around $73 per barrel—far below the $120+ peaks seen in 2022.
The sector’s economic challenges have translated into workforce reductions. BP recently announced plans to cut approximately 1,000 positions globally, while Shell confirmed 200 job eliminations across its US operations. Meanwhile, smaller producers face increasing pressure from investors demanding improved capital discipline and returns rather than production growth.
“The industry is caught between short-term economic pressures and long-term political uncertainties,” explains Daniel Yergin, vice chairman of S&P Global and energy markets historian. “They’re making strategic political calculations based on regulatory environment projections that extend well beyond current market conditions.”
Despite these headwinds, oil executives continue gravitating toward Trump and his promises of regulatory relief. The American Petroleum Institute’s political action committee has dramatically increased its contributions to Republican candidates in recent months, with internal documents showing over 78% of disbursements supporting GOP contenders who align with Trump’s energy policies.
Harold Hamm, founder of Continental Resources and longtime Trump ally, recently told investors at an energy conference in Houston: “We need leadership that understands American energy dominance isn’t just good business—it’s national security. The current regulatory environment is strangling production potential.”
This industry support comes despite Trump’s occasionally complicated relationship with oil producers. During his first term, he famously pressured OPEC to increase production to lower gasoline prices—a move that benefited consumers but challenged domestic producers. Nevertheless, industry leaders appear willing to overlook such tensions in favor of his broader deregulatory agenda.
Federal Reserve economic data shows that while the oil sector represents just 8% of GDP, its outsized influence on inflation, transportation costs, and geopolitics makes it a crucial political constituency. The Energy Information Administration reports that US oil production reached record highs of 13.3 million barrels per day in recent months—yet industry leaders argue this occurred despite, not because of, current policies.
The Biden administration has implemented numerous regulatory changes affecting the sector, including methane emission restrictions, drilling permit limitations on federal lands, and stricter environmental review processes. A recent Environmental Protection Agency rule requiring substantial methane leak reductions is projected to cost the industry approximately $3.7 billion annually, according to the agency’s own economic analysis.
“There’s a fundamental divergence in vision about America’s energy future,” notes Amy Myers Jaffe, managing director of the Climate Policy Lab at Tufts University. “The current administration sees managed transition to renewables as inevitable, while much of the industry wants to maximize fossil fuel production with minimal restrictions.”
Financial markets reflect these tensions. While the S&P 500 has gained approximately 25% over the past year, the Energy Select Sector SPDR Fund (XLE), which tracks major oil companies, has underperformed with just 8% growth in the same period. This performance gap highlights investors’ concerns about both short-term profitability and long-term industry viability.
Industry polling conducted by the Dallas Federal Reserve shows 67% of oil executives believe a second Trump administration would create a more favorable business environment. This preference spans from multinational corporations to independent producers across traditional energy corridors like Texas, Pennsylvania, and North Dakota.
Former Shell Oil president John Hofmeister, who now heads the advocacy group Citizens for Affordable Energy, explains: “It’s not just about regulation—it’s about predictability. Companies making multi-billion dollar investment decisions need regulatory consistency that extends beyond a single administration.”
The industry’s support for Trump in 2025 and beyond also reflects broader concerns about energy transition timelines. While many European oil majors have accelerated renewable investments, American counterparts have maintained more cautious approaches. A second Trump presidency could potentially validate this more measured transition strategy.
As the election approaches, the energy sector’s political influence extends beyond direct campaign contributions. Industry employment represents a significant voting bloc in key swing states like Pennsylvania and Ohio. The American Petroleum Institute estimates that the oil and gas industry supports over 11.3 million American jobs—a constituency that candidates from both parties are eager to court.
Whether the industry’s political bet pays off remains uncertain, but one thing is clear: despite current economic challenges, America’s oil sector sees its future prosperity tied closely to the political winds blowing toward 2025 and beyond.
