Bidding for Gulf Oil Leases Begins in June

In waving through planned 2025 sale, the Trump administration clears deck for more, bigger lease offerings.

Pennzenergy Company Oil Exploration Drilling Rig, Ship Shoal 150, in the Gulf Of Mexico. Archival Photo By Getty Images

Bidding for nearly 100 million acres of offshore oil and gas leases off Louisiana and east Texas will begin in June in a sale similar to one offered by the Biden administration in April 2024.

The Department of the Interior announced on April 4 that its Bureau of Ocean Energy Management is offering oil and gas leases in “an area of approximately 17,518 whole and partial blocks covering approximately 94.1 million acres” in the Gulf of America.

This is the same area—identified as Sale 262—the bureau offered in its December 2023 “2024-29 National Outer Continental Shelf Oil and Gas Leasing Program“ and April 2024 “candidate areas” notice.

The Biden administration’s 2024–2029 three lease sales were the fewest ever for the five-year program, and it was the first time the program offered no leases in the Atlantic, Pacific, and Alaskan areas.

Paltry lease offerings were among the reasons President Donald Trump suspended Sale 262 in executive actions on the day he was inaugurated and instructed Interior Secretary Doug Burgum to review federal offshore oil and gas leasing regulations.

In February, Burgum directed his department to expedite leasing for oil and gas exploration and production while continuing to refashion a five-year program likely to see more sales with leases beyond the gulf.

Getting on with Sale 262 is “an important step to restore a pro-American energy approach to federal offshore leasing,” American Petroleum Institute Vice President of Upstream Policy Holly Hopkins said in an April 4 statement.

She said the institute’s 600 members, businesses that support 11 million jobs, welcome Trump administration policies that “fully leverage the Gulf of America’s vast resources as a critical source of government revenue, economic growth, and energy security.”

A robust leasing program could “generate over $8 billion in additional government revenue by 2040,” Hopkins said.

Nearly 97 percent of all offshore oil and gas production in the United States occurs within three Gulf of America zones spanning more than 160 million acres, according to the bureau.

The gulf produces about 1.8 million barrels of oil per day, nearly 13 percent of domestic crude production, more than all states other than Texas and New Mexico, the U.S. Environmental Information Administration reported in its March 31 monthly production update.

Under the president’s energy policies, designed to increase domestic oil and gas production to affordably meet quadrupling electrical demand while exporting liquid natural gas to pay down the $37 trillion federal debt, managing federal public lands for energy development is an emergent priority.

Since Trump took office, the Interior Department has collected nearly $40 million in public lands oil and gas lease sales, nearly quadrupling the 2024 first-quarter lease sales, according to the Department of the Interior.

Offshore leases, however, generate more revenues for the federal government and draw more industry interest than those onshore—and there hasn’t been an auction in more than 16 months.

Sale Area 262 in the Gulf of America off east Texas and Louisiana, where the darker red coloring indicates the greatest interest among prospective lease-buyers. BOEM

Market Trumps Policy

The Department of the Interior’s Bureau of Land Management reported in early April that it had leased 34 parcels for oil and gas development spanning 25,038 acres for slightly more than $39 million during the first three months of 2025 in auctions across five states—Montana, North Dakota, New Mexico, Wyoming, and Nevada.

The most recent Gulf of America lease sale in December 2023, which a court ruling forced the Biden administration to conduct, generated $382.2 million for 311 tracts spanning 1.7 million acres.

On Jan. 6, two weeks before Trump’s inauguration, President Joe Biden issued two presidential memoranda withdrawing 334 million acres off the Atlantic Coast, 250 million acres off the West Coast, and 44 million acres in the northern Bering Sea from oil and gas development.

Among Trump’s day-one executive actions was an order revoking Biden’s withdrawals and lifting restrictions in the gulf, where the Bureau of Ocean Energy Management estimates 29.59 billion barrels of oil and 54.84 trillion cubic feet of gas are “technically recoverable.”

Burgum said in an April 4 statement that the administration “will not leave ... critical energy resources locked up when so many Americans are suffering through the unnecessarily high cost of living imposed by the previous administration.”

Despite the reversal in policies since January, oil production on federal lands has only slightly ticked up in the last year, according to the Energy Information Administration.

In fact, of the 2,186 active leases spanning nearly 11.9 million acres in the gulf, less than a fifth—436 on 2.2 million acres—are producing, according to the bureau’s April 1 lease update.

Companies have 10 years to determine whether a lease is profitable to drill, but U.S. producers—especially in crude oil—were already operating on thin profit margins in a flush global market before OPEC+ announced that it would triple production in May and the president unleashed his “Liberation Day” tariffs on April 2.

The Energy Information Administration projects that global oil production will continue to grow in the coming years, outpacing demand by 2026. In January, it forecast that crude oil prices would drop by 8 percent in 2025 and another 11 percent next year.

In the five days since Trump imposed his reciprocal tariff regime, the market price for West Texas Intermediate crude has declined by 15 percent. Industry analysts have said that slowdowns and shutdowns, including layoffs, are on the horizon if there is no shift in direction.

National Ocean Industries Association President Erik Milito said in an April 4 statement that lower energy costs drive business growth, which spurs demand for more energy, expanding markets, swelling volume, and restoring profitability, balance, and certainty to investors and industry.

“[The sale is a] timely action in restoring predictability and normalcy to the gulf’s offshore energy sector,” he said. “By moving forward with Lease Sale 262, the administration is hanging an ‘open for business’ sign in the Gulf of America—a move that will be a boon for our nation.”