economy
Trump's drill-baby-drill philosophy won’t solve this price shock. Here’s why
The price of a barrel of oil is at a four-year high. But don’t expect another American production boom to replace the crude that’s choked off in the Strait of Hormuz.
TL;DR
- Oil prices are at a four-year high, but US production growth is slowing.
- Oil companies are investing more in share repurchases than exploration.
- The Trump administration is taking steps to increase US production, but its impact is uncertain.
- The US oil boom began in 2009 and saw the US become the world's leading oil producer in 2018.
- Past price volatility and bankruptcies have made the industry more cautious.
- Companies are focused on strong balance sheets rather than rapid growth.
- Any increase in US production is expected to be minimal and insufficient to cover global supply shortages.