Oil and gas drilling permits in Texas, the heart of U.S. crude production, collapsed to a four-year low in April as producers brace for a double whammy of rising OPEC+ output and Trump’s escalating trade war, which threaten to prolong the oil price slump.
Key Data & Reactions:
- Permit Plunge: Just 570 new drilling applications were filed in April—down 28% from March and the lowest since February 2021 (Enverus).
- Rig Retreat: The Permian Basin lost 2 rigs last week, shrinking to 287 active rigs—the fewest since December 2021 (Baker Hughes).
- Producer Pullback:
- Diamondback Energy cutting 3 rigs in Q2, with more reductions possible if prices drop further.
- Coterra Energy slashing 3 Permian rigs in 2025; Matador Resources dropping 1 rig by mid-2025.
Market Pressures:
- OPEC+ Flood: The group plans to add 411K bpd in June, accelerating supply hikes amid weak demand fears.
- Trade War Toll: Trump’s April 2 tariffs (dubbed “Liberation Day”) sparked recession worries, sinking oil to four-year lows.
- Permian Slowdown: The basin, producing 6.39M bpd (half of U.S. output), faces shrinking investment as prices hover near $60/bbl WTI.
Texas Oil Drilling Permits Plunge to 4-Year Low as OPEC+ Hike, Trade War Spook Producers