Trump doubled down on his pledge of imposing a wave of tariffs in a “liberation Day” address on 2 April, upending existing trade arrangements that were in place for years, if not decades. It also underscored his determination to repatriate manufacturing jobs lost to globalization and automation. While the tariffs put on full display his willingness to make bold and risky moves, the signature One Big Beautiful Bill Act (OBBBA), passed on 4 July, upheld his campaign pledge to end federal support for electric vehicles (EV). This policy reversal has already prompted major battery and automotive manufacturers to pause or postpone new US projects amid heightened operational and regulatory risks. It has, however, excited US offshore oil and gas producers with the prospect of lower royalty rates and renewed leasing in the Gulf of America.     

Rystad Energy has published more than 100 market reports, commentaries and alerts, capturing the potential impacts of the administration’s policy pronouncements on the energy sector, captured in a special report series ‘Trump and Energy’. We have studied the outlook on investment, supply and demand as well as supply chains. Against the uncertain trade and geopolitical backdrop, Rystad Energy has also released its House View, offering our assessment of how we believe the global system will evolve in the next 15 years. This month, REview offers a quick take on the House View, along with a high-level assessment of the macroeconomic backdrop, the outlook for US onshore producers and the deepwater industry amid the many policy shifts and turns.

Rystad Energy House View: Accelerating transition amid oil and gas resilience

The first edition focuses on global energy demand through 2040. Total energy use will rise steadily, driven by transport, industrial activity and infrastructure expansion, with power demand projected to grow 50%. Solar and wind could supply nearly half of global generation by 2040, supported by an eight-fold rise in storage. Even so, oil and gas will remain essential energy sources in the future. Oil demand peaks early next decade but declines slowly, while gas continues growing through most of the 2030s. Coal enters a structural decline while nuclear picks up slightly to bolster energy security. CO₂ emissions are expected to peak in 2026 but fall unevenly across regions. Policy uncertainty remains a key risk, though cost trends and market forces support continued decarbonization momentum.

Trump and Energy: Early wins

Since April, the Trump administration’s tariff strategy has moved from signaling to implementation. Measures have combined tariff expansions, licensing carve-outs and temporary truces, notably a 90-day US-China pause announced on 11 August. The approach emphasizes national security, industrial policy and customs revenue as a fiscal tool. Initial macro impacts have been milder than expected: July headline inflation held at about 2.7%, core at 3.1%, and GDP growth rebounded to 3.0% annualized in 2Q25, even though the job market has weakened. Equities remain resilient, with the S&P 500 and Nasdaq at record or near-record highs. Customs receipts reached a July record, doubling year-to-date versus last year, though tariffs still represent only about 5% of federal revenue. The International Monetary Fund’s (IMF) latest outlook remains constructive, projecting 2025 global growth at 3.0%, with modest upgrades across most regions.

While current conditions show stable inflation, strong markets and fiscal upside, medium-term risks persist – trade diversion, structural inefficiencies and potential retaliation could alter the trajectory sharply. We have characterized Trump’s tariffs as his boldest bet. In a one-shot scenario, the administration would already appear to have won. But the real game of international trade is ongoing, and thus far, the outcome remains unwritten.

US oil and gas

Sentiment among US E&Ps has improved slightly in recent months, as fears regarding potential for an escalating trade war have abated. However, 2026 WTI futures still trade at just $62 per barrel, meaning that drilling levels are likely to remain low, down 40 rigs since end-2024. By the end of this year, US oil production is likely to be in maintenance mode, where it will remain until oil prices move back into the $70s. Gas market fundamentals are stronger, with demand ramping up from both domestic sources and LNG exports. However, a mild summer allowed gas storage inventories to swell and means that further drilling recovery is likely to be deferred into next year. Dwindling core inventory and declining well performance mean that achieving the necessary pace of gas output growth will require higher gas prices than it did in previous years.

Although the administration has been a vocal booster of US oil and gas, we do not expect a material supply-side impact on Lower 48 onshore oil and gas activity. Most drilling is on private lands, and the impact of tax changes is modest relative to the headwinds from lower oil prices. WTI prices in the low $60s present a fundamental challenge to the shale business model, which is predicated on production that is at least flat, allowing the sector to return more capital to shareholders than other industries do. Prolonged prices in this range would likely precipitate more consolidation, as operators cut corporate costs to maintain production and payouts simultaneously.

A deepwater boom?

Deepwater is once again proving to be the engine of oil supply growth, with 2025 shaping up as the strongest year in more than a decade. After modest gains averaging 140,000 barrels per day (bpd) annually between 2022 and 2024, additions are surging past 630,000 bpd this year, the highest in 15 years, before accelerating further in 2026 with over 900,000 bpd of new supply, an all-time record. This wave is powered by mega projects across Brazil, Guyana, the Gulf of America, Norway, and West Africa, underpinned by more than  billion barrels of oil equivalent (boe) sanctioned annually since 2020 and nearly $60 billion in greenfield capex each year.

Yet, the sector faces a mounting challenge: undeveloped inventory is being drawn down rapidly, raising questions over whether today’s pool of discoveries is large enough to sustain growth through the second half of the decade and beyond. With 2025 shaping up as a quieter year for new project sanctions, the risk of greater reliance on OPEC+ barrels looms large. That makes exploration success paramount. Encouragingly, momentum at the drill bit has returned, with 2025 already yielding highprofile finds from ExxonMobil’s Nefertari in Egypt to BP’s 10 announced discoveries and ENI’s 600 million boe year to date. Namibia, Brazil, the Gulf of America, and Southeast Asia continue to headline exploration breakthroughs, while 25 high-impact wells are slated for the second half of the year with nearly 70% of them in deep- and ultra-deepwater. The message is clear: deepwater will keep setting records in the near term, but only a renewed exploration cycle can secure its leadership role into the 2030s.

In conclusion, our research shows that global energy demand will continue to rise, while the system meeting it will undergo a significant transformation. Electricity and renewables will play a steadily larger role. Power demand will jump multi-fold over the next two decades, driven by transport electrification and data center growth, while oil and gas will remain essential. Rystad Energy will continue to publish thorough and granular research, assessing the impact of trade flow and macro policy changes on the energy industry.

Each of the authors from this article will be presenting at our Americas Annual Summit on Thursday, 11 September. We invite you to learn more and join us.

Authors: 

Claudio Galimberti  

Chief Economist & Global Market Analysis Director
claudio.galimberti@rystadenergy.com

Amber McCullagh

Senior Vice President, North America Research
amber.mccullagh@rystadenergy.com

Aditya Ravi

Senior Vice President, Upstream Research
aditya.ravi@rystadenergy.com

Manash Goswami

Vice President, Analytics
manash.goswami@rystadenergy.com

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(The data and forecasts contained in this column are Rystad Energy’s and the opinions are of the authors.)