The extraordinary expansion of the United States’ upstream oil and gas market has been unprecedented and paves the way for a new era of responsible development in the US Gulf region. In recent months, the upstream market has been boosted by the new executive order signed by President Donald Trump that mandates the DOE and energy companies to drastically ramp up oil and gas production in the United States. The government recently opened its first offshore lease sale since 2023 under the previous administration, and the energy companies are salivating at the new opportunities presented.
When one door closes, another one opens; at least that much is true in the US energy market
Under the Biden administration, the federal government actively promoted the renewable energy sector as a method to address concerns over climate change, which has become a problem for the vast majority of nations around the world. However, the Biden administration could not have foreseen the stance that the Trump Presidency would take and essentially cut off the renewable energy sector in the US.
During his Presidential campaign, Trump stated that if he were elected, the US would “drill, baby, drill”. At the time, many dismissed his statements as simply campaign rhetoric; however, since taking office, the message has become abundantly clear. Trump issued an executive order aimed directly at increasing the US’s energy output from the conventional upstream oil and gas sector.
International oil companies have offered upwards of $300 million for the new slate of oil projects in the US
The federal government recently opened the latest offshore lease sale for a litany of international energy companies, including but not limited to Shell, BP, ExxonMobil, and others. The sale follows Trump’s recent announcement to allow new drilling operations for oil and gas off the coasts of Florida and California, marking the return of drilling projects to the two states for the first time in decades.
Republicans are fostering a new era of energy production in the US Gulf
The new lease sale has been mandated by a sweeping tax and spending bill approved by the majority of Republicans over the summer. Under this new legislation, any energy companies that operate in the US will pay a 12.5% royalty on oil produced from the new leases that were sold. The sale round saw up to 30 energy companies submitting bids for parcels covering an astonishing 1,600 square miles.
The new legislation also provides the opportunity for two lease sales every year through 2039 and one sale in 2040, continuing on the path to extreme dominance of the upstream market by the United States.
“This sale reflects a significant step in the federal government’s efforts to restore U.S. energy dominance and advance responsible offshore energy development,” – Laura Robbins, acting director of the Gulf region for the Bureau of Ocean Energy Management
It’s worth mentioning that not everyone is pleased with the new lease sale in the upstream market in the United States. Several reputable environmental groups have lamented the new lease sale, noting it places an already perilous region at risk of oil spills.
“The Gulf is already overwhelmed with thousands of oil rigs and pipelines, and oil companies are doing a terrible job of cleaning up after themselves,” – Rachel Matthews with the Center for Biological Diversity
Several of the largest US-based energy companies are set to increase operations in the region
The new lease sale exemplifies the positive sentiment for oil and gas production in the United States under Donald Trump. Chevron has recently announced its plans to boost output capacity in the Gulf region in 2026, paving the way forward for more energy companies to do the same. While the rest of the world aims to end the reliance on oil and gas, the United States of America is heading, quite literally, in the opposite direction, almost in spite. With the new year around the corner, the US upstream market is set to grow significantly.
