Despite the Biden administration’s tough stance on fossil fuels and a push for decarbonization, the oil and gas industry has experienced better financial performance, stock growth, and production under President Joe Biden than it did under former President Donald Trump. Contrary to Trump’s pro-oil rhetoric and promises to deregulate the industry in his potential 2024 campaign, his administration saw lower profitability and occasional oversupply issues that negatively impacted financials.
Under Biden, the sector has faced stricter regulations, including higher drilling costs on federal lands, new methane emission standards, and a temporary halt on natural gas export permits. However, these challenges have not stifled the industry’s profitability. In 2023, the energy sector boasted an average profit margin of 11.3%, according to S&P Capital IQ, with similar expectations for 2024. This is a stark contrast to the near-zero average margin during Trump’s tenure, which included the economically devastating year of 2020 due to the COVID-19 pandemic.
ExxonMobil (NYSE:XOM), as a leading indicator in the sector, has mirrored this trend. After facing a severe loss of $22.4 billion in 2020, ExxonMobil bounced back with a record $55.7 billion profit in 2022, outperforming any year during the Trump administration. This turnaround highlights how global market dynamics and technological advancements, such as those seen during the hydraulic fracturing boom around 2012, play a more pivotal role in the sector’s success than the direct influence of presidential policies.
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