US Media and the Oil Industry: The Lies that Blind

Where is the oil? 

In the first week of December 2024, the Energy Information Administration (EIA) reported that the U.S. produced a record amount of oil at 13.6 million barrels per day. This record was achieved under the Biden administration despite how we were constantly told this administration was holding back the oil industry with onerous regulations. Trump promised that he would unleash “oceans of liquid gold” in America. Secretary of the Treasury Scott Bessent touted his 3-3-3 plan that included “increasing U.S. energy production to the equivalent of an additional 3 million barrels of oil per day.”  And they very quickly made good on their promises to remove any regulations for the oil and gas industry. And now, in this new Trump/Bessent era of drill baby drill and letting the free market do its thing, U.S. crude oil production has fallen to just over 13.2 million barrels per day. 

Where is the oil? Why was production breaking records under what we were told was an oppressive Biden regime that was choking the life out of the oil industry and now that same industry is rapidly declining under Trump? Is there no one in the financial press in the U.S. who thinks this is a question worth asking?  

Tapping the Brakes

I wrote this back in early 2024 

“In March of 2019, U.S. oil major Chevron announced it planned to make investments in its Permian oil operations that would increase its production of oil and other liquids to 900,000 barrels per day (bpd) by 2023. Approximately 95 minutes later, Exxon announced that it planned to reach one million bdp by 2024.”

Chevron and Exxon aren’t exactly buddies. And this battle about who could produce a million barrels per day in the Permian was at the heart of the fraud case against Exxon because after Exxon CEO Darren Woods said they would produce a million bpd in the Permian by 2024, some of Exxon’s employees pointed out this was impossible. They were right as the Boston Globe pointed out in a recent profile of Lindsey Gulden, one of the employees Exxon fired for pointing this out: 

“Gulden’s confrontation with Exxon over the last several years stems from calculations aimed at predicting the future: Would Exxon be able to squeeze a million oil-equivalent barrels a day from the Permian Basin in 2024? As it turns out, state-level government databases show Exxon didn’t nearly reach that number. In 2024, Exxon extracted about 600,000 barrels a day — the amount Gulden and others maintained all along was more realistic.”

Back then, Chevron also got into the game of promising a million barrels per day in the Permian. Now that the Permian is in decline, it’s worth checking in on those claims and how much of the media continues to perform as a propaganda outfit for the oil industry. 

In 2023, Chevron CEO Mike Wirth was selling the Permian to investors in a big way. “The Permian is a tremendous asset for our company and for our country,” Wirth said Monday on CNBC. “It is the best place for us to be investing our dollars. It’s the largest single destination for investment.”

Early in 2025, Wirth lowered expectations for the Permian’s growth telling as reported by Oil & Gas Journal, “Chevron’s output in the Permian should grow 9-10% this year, Wirth said, and ‘a little bit less than that’ in 2026.

Lowered growth expectations but still strong for 2025 and 2026. In April Reuters told us that Chevron’s “triple-frac” approach would “cut costs” and “time” for Permian oil production. They also reported that Chevron achieved its 1 million barrel per day target and would be headed for 1.1 million barrels per day in 2025. 

“Chevron hit production of 1 million barrels of oil equivalent per day from the Permian in December and aims to increase output by about 10% this year, CEO Mike Wirth has said previously.”

In July Oilprice.com reported that “Chevron Prioritizes Cash Flow Over Growth in Permian” and stated that “Chevron has effectively reached its long-term production goal of 1 million barrels of oil equivalent per day (boe/d) in the Permian Basin” and that “the company now plans to hold production steady through 2040.” So that double digit growth promised two months ago is no longer happening.  The article then provides cover for this rather large change from Chevron.

“The Permian has fueled years of rapid growth for Chevron, but with production now topping 1 million boe/d, the company is deliberately tapping the brakes.”

If you just read the press, it would appear that Chevron is producing more than a million barrels per day and thus is choosing to “tap the brakes” and no longer will deliver the promised growth over the next two years from the oil field its CEO described as “the largest single destination for investment” just two years ago.  But at least they are topping 1 mpbd, right?  

“In the first quarter, Chevron's Permian production fell 3% to 960,000 b/d of equivalent oil – even though the company was headed toward 1 million boe/d in the Permian in the fourth quarter of 2024 at 992,000 boe/d.”

So that is what “effectively reached” means. Not quite the same as topping. Just a few months ago we were told that Chevron was going to grow production to 1.1 million bpd in 2025 and instead reality is that their production is declining. Just like overall U.S. crude production.  

How to cover up such a big miss in your short-term forecasts? Just say it was intentional and you are “tapping the brakes.”  That way the media can just play along and no one has to ask the embarrassing question about what happened to the oil investors were promised?  Meanwhile, Chevron just got a big win in its fight with Exxon over its Hess acquisition which was described by the Wall Street Journal as a “much-needed win.” Why would Chevron require a win these days? That explanation is down a bit in the article. 

“This year, Chevron is cutting spending in the Permian for the first time since the pandemic. The company has signaled its production growth there could peak sooner than it originally thought.”

Did the company signal that?  If so, I missed that. But there it is anyway – “could peak sooner than it originally thought.”  I expect that will be the extent of media coverage on this issue.  

Structural Change in Global Oil Markets

Remember when the U.S. bombed Iran to follow up ongoing bombing by Israel?  Did you know that Iran has the third largest oil reserves in the world?

Iran also is one of the top ten oil producers in the world with roughly 4 million barrels per day. There was a time when bombing of one of the top oil producers would rapidly drive up global oil prices. That time has passed. So what has changed?  

Here is a hint:

Bombing Iran didn’t meaningfully move oil prices.  And neither has the reality that the largest oil field in the world has peaked and is declining.

Where are the headlines about how the world’s largest oil producer (U.S.) is now in decline?  Will the peak oil people finally be right?  Shouldn’t the decline of the world’s largest oil producer send oil prices running higher?  If we weren’t in the middle of an unprecedented energy transition one would expect the markets would begin to price in the future oil shortages – but we are and the markets know it. It turns out the peak in oil that is going to be the real game changer will be the peak in oil demand being driven by China. Right now the world is producing more oil than it is consuming which means oil prices are going to go lower. 

I’ve argued that the plans to build big new crude oil export terminals in the U.S. were misguided because I have a pretty good understanding of the answer to the question of “where is the oil?”  It isn’t there. One of the investors of a proposed export facility said that the U.S. would be exporting 8 million barrels per day in 2025.  Global oil prices are low and we are told that low prices drive demand in the hydrocarbon markets. Are U.S. exports booming?  Not now. 

“U.S. exports of crude oil fell to 2.3 million barrels per day, the lowest since July 2023 and marked the steepest fall since January 2024.”

This time last year exports were over 4 million bpd. Is this recent dip in exports a short-term blip due to the uncertainties in the markets thanks to a lack of coherent policy coming from the U.S. or a sign that there isn’t as much demand for cheap light oil from the U.S.?

Where is the oil now that we have “drill baby drill” as official U.S. energy policy?  They really don’t want anyone asking this question. Hart Energy is a big fan of the oil industry.  Instead of asking that question they published this last week. 

Every argument in this piece is easily refuted by things I’ve written in the past. Hell, I’ve written the “technology won’t save the shale industry” article multiple times over the years. Would it surprise you that one of the solutions they claim will drive growth in the Permian is Chevron’s “triple frac?”  Perhaps they should have checked with Chevron on that one. 

The corporate media in America seems eager to embrace being the propaganda arm of the Trump administration.  However, the reality is that the corporate media has done this for the oil industry for decades and continues to outdo itself in this space. They will do what they do. 

Does anyone remember this bit from 2018?

“U.S. shale firms are more profitable than ever after a strong third quarter, according to a Reuters analysis of results for 32 independent producers.”

Sounds pretty good, right?  How much profit did they make?

“The group’s cash flow deficit has narrowed to $945 million as U.S. benchmark crude hit $70 a barrel and production soared,” reported Reuters.

Yup. "More profitable than ever" actually meant they only lost roughly $1 billion. The disinformation in the media about the U.S. shale industry remains the same as it ever was. Did you see the headlines claiming that “Permian methane emissions dropped 50% in two years?” There were many media hits with that info. They are completely untrue. Same as it ever was. The media is doing what it always has done and it likely is going to get worse.  Despite all of that it is clear that something has changed in the global oil markets.  I expect we will see a lot more of the media telling us that it isn’t happening…but it is. Plan accordingly.