Trump's Gulf Lease Sale Draws Tepid Response from Energy Firms
The Trump administration is set to hold its third oil and gas auction in the Gulf of Mexico on August 12, as part of a plan to sell off more than 81 million acres of federal offshore land. The sale, mandated by President Donald Trump's 2025 tax and spending law, will offer 15,100 unleased blocks across the U.S. Outer Continental Shelf.
The auction comes at a time when crude prices are near four-year highs, with Brent crude trading above $89 per barrel on Wednesday. However, despite the high prices and large area available for leasing, companies are bidding on only a small portion of it. Pre-sale documents show that 12 companies submitted 69 bids covering roughly 330,000 acres, equivalent to about 0.4% of the total area offered.
The Gulf currently accounts for around 15% of U.S. oil production, but offshore development has lost ground to shale in recent years due to higher upfront capital costs and longer project timelines.