Smooth and continuous trade flows are vital for the system to work.

“As you’ve heard me say many times, we have more liquid gold under our feet than any nation on Earth,” Trump said last night, in reference to oil. He followed that up with a major applause line: “I fully authorize the most talented team ever assembled to go and get it. It’s called drill, baby, drill.”

It’s good politics, but Trump’s comments aren’t based on what’s really going on in energy markets. The U.S. absolutely should take pride in its leadership in oil production, but it’s already the world leader, and production is already at a record high. The U.S. produced 4.72 billion barrels of crude oil last year, the highest-production year on record. December 2024, the most recent month for which data are available, was the highest-production month on record as well.

Crude oil production rose steadily under the Biden administration, a fact that Biden at times didn’t want to publicize because he was also wasting taxpayer money on green-energy scams. The reason is not anything Biden did. Oil is traded on a global market and production is mostly related to price signals on that market.

Last year was one of the most stable years on record in oil prices, with Brent crude, the international benchmark price, staying between $74 and $90 per barrel all year. Oil companies were profitable, distributing dividends to shareholders and investing in capital projects. They aren’t likely to go on a huge production surge, which would bring down the price of oil and hurt their profits.

This isn’t monopolistic behavior. If it was, we’d expect to see restrictions on production and rising prices. But U.S. production is at record highs and has been steadily trending upward since the pandemic, and the price has held steady, not risen. The industry is just in a good spot at the moment.

Oil producers don’t make their decisions based on who the president is. Republicans are seen as pro-oil, Democrats as anti-oil, but the fracking revolution began during Obama’s presidency and continued during Trump’s presidency, and the production records happened under Biden.

This is a very good thing. You don’t want to live in a country where businesses make decisions based on who happens to get more votes in the right states once every four years. It’s a sign that the American economy is working well that oil production has little, if anything, to do with the occupant of the White House.

Trump also talked about Biden’s stonewalling pipeline construction, and there he has more of a point. Biden’s Federal Regulatory Energy Commission slowed the approval process for pipeline projects. Trump is right to reverse that and get projects moving again. Pipeline infrastructure has not caught up with the changed geography of the oil market since the fracking revolution. Doug Burgum knows a thing or two about pipelines and hopefully will be able to exert some positive influence in the administration.

The issue for Trump is that the U.S. energy industry’s success story is at odds with his overall trade-skeptical economic vision. Some of those important pipeline projects that would greatly benefit the U.S. would also increase the trade deficit by carrying in Canadian crude oil.

Despite being the world’s top crude oil producer, the U.S. is still a net importer of crude oil. That’s because the U.S. has some of the best refineries in the world, and they are designed with specific kinds of foreign oil in mind. This is especially true for refineries in the Midwest that are built for the hard-to-refine oil from the Alberta tar sands.

That the U.S. oil industry is such a success, and undoubtedly good for the country, is because it is part of global energy markets. It imports more crude oil than it exports, and it exports more refined products than it imports. Smooth and continuous trade flows are vital for the system to work.

Any rinky-dink country can pull crude oil out of the ground. The U.S. is special because it can do that better than anyone while also excelling at turning that crude oil into stuff people can actually use. It has some of the best engineers and geologists financed by some of the best investors to make that happen. And it doesn’t happen without global markets.