“Drill, baby, drill” was one of President-elect Donald Trump’s mantras on the campaign trail. His promise: By expanding domestic energy production, especially oil and gas, he’d cut Americans’ energy bills in half within a year.  

But even with an oil-friendly administration on the way, U.S. producers face a complicated market picture. On Thursday, the International Energy Agency forecast a oil supply surplus of over $1 million barrels per day next year. 

The basic story of oil this year is that the growth in demand for crude keeps falling short of expectations, said Mark Finley at Rice University.

“And so, it looks like global oil demand is pretty sluggish,” Finley said. “It’s still growing, but not very aggressively.”

One of the main reasons is weakening demand from China. “Which is both a function of the rapid growth of electric cars, but also the overall weakness of their economy,” Finley said.

China’s been going through tough economic times, as you might’ve heard, and a weaker economy consumes less oil. At the same time, the country is rapidly switching to EVs, which cuts into the market for gasoline.

Amid that softer demand, OPEC — the cartel of oil-producing countries in the Middle East and elsewhere — has been holding back its oil production to support prices.

But Matt Smith, an analyst at Kpler, said, “At the same time, you’ve seen oil coming to the market from the likes of Guyana, from Brazil, from the U.S., from Canada, from Norway.”

Essentially, making up for any supply gap left by OPEC, Smith said.

So, with weak demand and ample supply, you get lower prices. Brent crude right now is trading around $70 per barrel.

“This creates challenges, financial challenges for the oil industry that really depends on high prices in order to make big profits,” said Clark Williams-Derry, an analyst with the Institute for Energy Economics and Financial Analysis.

Lower prices mean oil companies aren’t as eager to spend money to drill. 

So, he said, while many oil producers will welcome the Trump administration’s likely efforts to cut regulations and open more public land to drilling, “if the conditions aren’t there for oil companies to make money, they’re not going to be doing what a politician tells them to do. They’re going to be doing what’s profitable.”

Of course, Williams-Derry added, oil markets are susceptible to global conflicts and other disruptions, which can push prices up and lead companies to boost production.