U.S. Shale Industry Faces Crisis as Oil Prices Plunge Below Profitability Threshold
A combination of increased OPEC output and Trump’s tariffs drives crude prices to $55 per barrel, threatening massive cutbacks in U.S. drilling activity.
- U.S. crude oil prices have dropped to around $55 per barrel, far below the $65 per barrel needed for profitable shale drilling, according to industry analysts.
- OPEC and its allies have accelerated output hikes, unwinding 2.2 million barrels per day of prior production cuts, intensifying downward pressure on global oil prices.
- Tariffs imposed by the Trump administration have raised costs for U.S. oil producers, particularly for steel and drilling equipment, further straining profit margins.
- Analysts warn that sustained low prices could lead to a dramatic reduction in U.S. oil rig counts, with estimates suggesting up to a 50% decrease in drilling activity if prices remain in the $50s.
- The U.S. Energy Information Administration has revised its 2025 crude price forecast downward to $63.88 per barrel, citing global trade policies and rising OPEC production as key factors.
The Globe and Mail 
Washington Examiner 
