In a move that caught the energy market off guard Friday evening, shares of Sable Offshore jumped more than 10% in extended trading after President Trump signed an executive order invoking the Defense Production Act of 1950 — a Cold War-era law — to allow the $2.5 billion oil-and-gas exploration company to resume offshore production off the coast of Southern California.
You read that right. A law designed to ensure military readiness during the Korean War is now being used to greenlight oil drilling off the California coast. Energy Secretary Chris Wright framed it as a national security imperative: “Today's order will strengthen America's oil supply and restore a pipeline system vital to our national security and defense, ensuring that West Coast military installations have the reliable energy critical to military readiness.”
The timing is not accidental. With Brent crude surging to $120 a barrel following Iranian missile strikes on commercial tankers in the Persian Gulf, the administration is under intense pressure to boost domestic energy production. California has been a fortress of opposition to offshore drilling for decades, making this executive order both a policy move and a political statement.
Sable Offshore is the direct beneficiary. The company has been sitting on significant offshore assets in the Santa Barbara Channel that have been effectively stranded by state and federal permitting restrictions. This executive order bypasses those hurdles entirely by reclassifying the energy infrastructure as critical to national defence — a legal maneuver that environmental groups are almost certain to challenge in court.
For energy investors, this is worth watching closely. If the order survives legal challenges, Sable could go from a speculative holding to an active producer in one of the most restricted energy basins in the country. That kind of optionality does not get priced in overnight. At the same time, the legal risk is real — California has fought offshore drilling at every level of government, and the courts could block implementation for months or years.
The broader takeaway is that the Trump administration is willing to use extraordinary executive powers to push domestic energy production, especially with oil prices at multi-year highs and an active military conflict putting supply chains at risk. Whether you love or hate the politics, the market implications are clear: U.S. energy companies with domestic assets just got a much friendlier regulatory environment. Keep an eye on Sable and the broader offshore drilling space.