The U.S. Gulf of Mexico can continue growing oil output even amid geopolitical volatility not seen in decades, oil and gas industry leaders said on Monday.
U.S. President Donald Trump’s global tariff announcements have since last month contributed to a decline in oil prices and fears of an economic downturn, making it more difficult for oil producers to follow his call of “drill, baby, drill.”
“We’ve never been in a situation where we have so much geopolitical volatility,” said Occidental Petroleum CEO Vicki Hollub, during a panel discussion at the Offshore Technology Conference in Houston on Monday.
Despite the oil price oscillations, which according to experts come mainly from the shale industry and not from offshore, oil leaders expressed confidence the Trump administration would remove obstacles to help grow production.
Oil output from the U.S. Gulf could reach up to 2.4 million barrels per day (bpd), up from the current level of roughly 1.8 million bpd, said Erik Milito, head of the U.S. National Ocean Industries Association.
Advancements in technology, including artificial intelligence, are also helping production, executives said.
“We’re seeing that today with the projects that are coming online, highly sophisticated projects that are overcoming a lot of the challenges that we saw 20 years ago,” Milito said.
The Trump administration plans to hold a lease sale for the U.S. Gulf in June as planned by the former administration of President Joe Biden.
That will be critical because shale oil production will eventually plateau and begin to decline, making it important to grow offshore exploration, Hollub said.
“We have to find a way to get more out of the Gulf of Mexico, and that’s got to happen in a big way,” she said.
Offshore production from the U.S. Gulf accounts for about 15% of total U.S. crude output.
In addition to geopolitical uncertainty, industry leaders pointed to inflation as another challenge facing the sector.
“We are challenging our local suppliers and challenging our international suppliers… on cost,” said Magda Chambriard, CEO of Brazil’s state-owned oil company Petrobras.
(Reporting by Sheila Dang and Marianna Parraga in Houston; Editing by Chris Reese)