Trump's Desire for Cheap Crude Prices Puts Big Oil Plans to Test

Oil companies are changing their investment plans for 2025 to bolster their balance sheets

- Bloomberg

Big Oil has a powerful ally in the White House, but the first quarter of Donald Trump's presidency was a real test for companies' plans. The rest of the year could be even tougher.

The US leader's desire for lower crude prices and his disruption of the global economy with trade tariffs are stressing the industry's finances, calling into question both shareholder returns and drilling plans.

Of the five global oil majors that report earnings this week, BP Plc is first in line and the most exposed to recent volatility. Even before Trump's trade war, the company's debt was rising and it had told investors to expect a reduction in quarterly share buybacks of as much as $1 billion.

The struggling UK company is not a total outlier. Chevron Corp.'s investor payouts are under pressure, with analysts expecting the oil major to trim its buyback 6% after the price of a barrel of crude plunged into the $60s. All of the majors, including Exxon Mobil Corp., Shell Plc and TotalEnergies SE could be tempted to slow spending on new projects as long as Trump is roiling markets.

"For the trade war at the moment, it probably makes it a bit harder to make any investment decisions," said TD Cowen managing director of energy equity research Jason Gabelman. "It wouldn't be shocking if you see some of these project decisions get pushed out."