I’ve always been leery of investing based on politics. In fact, the greatest use I’ve ever found for politics-based reasoning is that it usually signals the poverty of thought of the political pundits.

The Trump “drill, baby, drill” mantra is a case in point. The former and soon to be again President is doubtless a brilliant politician and reality show host. And he and his family have a deep background in the property business. But oil?

Two big issues in the petroleum domain (for what it’s worth, I was an oil analyst for most of a decade) are: –the overarching question of when we reach “peak oil” (which in today’s world no longer means when demand structurally exceeds supply, but when demand falls below supply once and for all), and

–figuring out the profit maximizing strategies of the big oil companies.

The second may well mean that the oils hold back production to keep prices high rather than produce flat out. There was a clear instance of this behavior during the oil crisis of the 1970s, when world oil prices skyrocketed. Washington passed laws setting the price of crude oil discovered before the 1970s at a low price, with a considerably higher one for output from newly discovered fields. As I confirmed after the crisis had abated in the early 1980s, American oil companies simply stopped producing “old” oil, making the domestic problem worse.

My guess, and “guess” is all it is, is that we’re already at peak oil–meaning peak demand–partly due to slow population growth in the major industrial countries, partly because of technological change–like EVs or high-mileage internal combustion engines–are reducing demand, partly because global warming means less use of heating oil in the winter.

Arguably, then, “drill, baby, drill” isn’t the best advice an oil company can get. And, if form follows true, the big oils may not drill so much even with sympathetic legislators encouraging it.