President Donald Trump’s pledge to bring oil prices down to $50 a barrel has put Texas’ oil and gas industry in the spotlight, with some economists and regional officials warning that cheaper fuel could come with cuts to drilling, jobs, and local public budgets.
The concern is rooted in how Texas benefited when crude prices rebounded after COVID-19 drove oil prices down, and when operators by 2024 were drilling record amounts of oil. The story described a period in which each barrel sold for at least $70, fueling profits and momentum that contributed billions in tax revenue to Texas coffers, school districts and local governments.
Some experts said the plan could work in the opposite direction if the U.S. oil market were flooded with additional supply. Trump, the report said, suggested the U.S. should take control of Venezuela’s oil after Venezuela arrested President Nicolás Maduro, arguing that flooding the market with Venezuela’s oil could lower fuel costs for consumers—an outcome they said could be damaging for Texas production and for the state’s broader economy.
The report said that when oil prices fall, operators can struggle to break even and profit less, which can translate into lower production. It added that the industry’s estimated 495,000 Texas employees could feel the impact through workforce changes, and that parts of Texas—such as the Permian Basin, where city and county governments rely on oil and gas revenue—could face reduced tax receipts.
In Odessa, Texas, Tom Manskey, the city’s economic development director, said he expects negative consequences even if the lower price helps at the pump. Manskey, describing Odessa as a city of about 120,000 and saying oil and gas is the dominant employer, said, “I would imagine it would have a negative effect on our region with regards to jobs and everything else,” adding that the region is already operating in “a very unpredictable economic time,” which he said is made worse by the lack of predictability in the marketplace.
Ray Perryman, an economist and founder of the Perryman Group, said a drop to $50 would likely produce major shifts for multiple parts of the U.S. economy and an uneven outcome for different groups. Perryman said: “If oil prices were to drop to $50 per barrel, the short-term effects are likely to be somewhat positive for many segments of the U.S. economy, but there would clearly be winners and losers.” He also said that in areas such as the Permian Basin, reducing oil and gas activity has ripple effects on housing and retail and can mean “lower tax revenue to local entities.”
Other industry voices in Texas offered a more optimistic assessment. Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, said existing drilling techniques would help operators keep access to an abundance of oil, pointing to horizontal drilling as a method that allows operators to reach larger reservoirs and reduces the need to drill new wells. Longanecker said that a “slight decline in production in 2026” would “modestly pressure (state and local) budgets,” and that Texas’ robust economy and drilling efficiencies would help mitigate statewide impacts.
Todd Staples, the president of the Texas Oil and Gas Association, said in a statement that the current environment does not signal serious trouble for the industry. Staples said, “The Texas oil and natural gas industry has a long history of delivering essential products while navigating price volatility,” and said what is being seen reflects market adjustment rather than distress, with companies adapting to current and forecast market conditions.
The report said there is a threshold below which production economics can deteriorate. Dane Gregoris, managing director of energy analytics firm Enverus, said it takes at least $62 per barrel in Texas to cover the cost of drilling additional wells and still make money, and that anything below that price would leave operators making little or no profit from new drilling. Gregoris said shareholders who have pushed oil companies to become profitable would not see those demands met.
The story also reported that Texas production has been relatively steady in the more recent period under Trump, citing figures of 5.8 million barrels per day between December 2024 and October 2025. It said drilling rigs declined over that span and that Texas had lost 20 rigs since Trump took office, according to Enverus data. Gregoris said such an environment would put companies in survival mode rather than thriving.
Renee Earls, president and chief executive of the Odessa Chamber of Commerce, said layoffs could slow the local economy by reducing spending. She said, “We’re all in the oil business, regardless of whether we work at a restaurant, in a chamber, or in a bank,” and said the region has “learned to always prefer stability.” Earls said she would begin to “panic” if oil dropped to $40 a barrel.
The Texas Tribune originally published the story, which the Associated Press distributed through a partnership with The Texas Tribune.