The US schista oil producers. UU. They face their threat more severely in years, since a sudden sale of crude oil prices caused by Donald Trump’s commercial war has taken parts of the sector to the edge of the sector to the edge of the failure, the executives warned.
The US oil prices have fallen 16 percent since the Trump’s “Day of Liberation Day” announcement last week, leaving them below the level that many producers in Texas say they need to reach the equilibrium point, and cause fears of fear that the industry can be forced to idle platforms.
Prices were submerged again on Thursday, since global markets focused on the commercial war of China-United States. Benchmark of the United States. Uu. West Texas Intermediate fell below $ 60 per barrel, for another $ 2/ba from Wednesday.
OPEC’s recent decision to increase production has also raised alarms.
“This reminds me exactly of Covid,” said Kirk Edwards, president of Latigo Petroleum, an independent producer based in Odessa, Texas, referring to the 2020 price accident that brought a wave of bankruptcies throughout the bituminous shale sector.
So, also, the oil markets faced the twin threats of demand falling and the new supplies of OPEC producers such as Saudi Arabia, which last week announced a plan to increase supplies faster than expected in the coming months.
“We face a double blow again,” Edwards said, adding that if prices did not recover in the coming months, there could be “devastating events” in the Permian basin, the most prolific oil field in the world and the machine room of the US industry.
Andy De La Rosa, a petroleum field service worker based in neighboring Midland, said there was a sense of restlessness in the Permian and tied parallels with another previous price accident a decade ago when US production and an avalanche of Saudi oil left the market and sent prices lowering.
“Seer [oil prices in] The 50s, I am worried about what is happening. It reminds me of 2015 when prices blocked, “said De la Rosa, who works for Underdog Wireline.” He has many of the same similarities with me and I am really worried about a global excess with crude. . . At some point, more and more people will end up being fired. ”
Bill Smead, Investment Director of Smead Capital Management, who has shares of several shale producers, said that the tariff war had created a “bloody disaster” that risked investors away from oil and gas businesses.
“Trump wants to lower the price of oil to $ 50 and will end with half the number of companies in the industry if that happens,” he said. “It would result in M&A with the strong collecting the pieces of the weakest players.”
The sale of oil in recent days has been dramatic, and comes along with great agitation in world capital markets caused by Trump’s decision to launch a global commercial war.
The president of the United States said Wednesday that he was withdrawing from the toughest encumbrances he had planned, sending the very high stock markets. Petroleum prices also increased, with the US score.
The analysts said that Trump’s decision to leave tariffs to China, the world’s largest oil importer, would continue to advance on the perspectives of demand for global crude.
Bill Farren-Price at the Oxford Energy Studies Institute said: “There were quite stable expectations for the growth of oil demand this year. I think they are all in the container. “
With less than $ 60 per barrel, many American oil producers will have difficulties in obtaining profits, especially in some of the country’s aging basins, which forces them to stop drilling, place drilling platforms and cut work.
Rystad Energy said that many bituminous shale producers faced the equilibrium costs of $ 62 per WTI barrel when the debt service and dividend payments were included.
The potential demand shock has worsened because of the fears that Saudi Arabia, one of the lower cost producers in the world, can be ready to make a new movement for market share by pumping more oil and allowing prices to deviate, forcing rival producers outside the business.
The OPEC decision to add 400,000 barrels of oil per day to global supplies had pressed oil prices even before Trump’s commercial war.
The agitation has also caused a massive sale in the actions of the bituminous shale producers, which face greater production costs than conventional oil drilling. Western Petroleum and Devon Energy lost more than 12 percent of their value in the five days since Trump announced their “reciprocal tariffs.”
The clash is not on the same scale as 2020. Then, the reference point of the United States briefly quoted below zero as the COVID-19 pandemic crushed the global demand, sending the Lutita industry to a deep freezing and causing thousands of losses of jobs as dozens of companies declared in bankruptcy.
But the industry has organized a remarkable recovery since then, with Wall Street forcing producers to repair the balances and avoid the expensive drilling spree. The new era of capital discipline has left producers better to handle a new recession, analysts say.
American oil production has recovered since the 2020 clash and reached a record of more than 13 million barrels per day in 2024.
But analysts who expected the country to reach even greater volumes this year are now reviewing the production forecasts, with the first decrease in production since the pandemic is now possible.
S&P Global Commodity Insights said this week that oil of $ 50 could cause production to decrease by more than 1 mn B/D, far from the target target of the Trump administration of rapid growth in production to reduce gasoline prices in the United States.
Many American oil executives supported Trump in last year’s elections, but they are recovering from the price turn since he entered the position. Some executives have grown with the Energy Strategy of the White House.
“This better administration has a plan @Secretrywright,” said Kaes Van’t Hof, president of Diamondback Energy, in a publication on social networks this week addressed to the Secretary of Energy Chris Wright. “The only industry that was really built in the US. UU., Manufacture in the United States, grew jobs in the US. And improved the commercial deficit (and by GDP proxy) in the United States during the last decade … Smart movement.”
Van’t Hof did not respond to a request for comments.
Adrian Carrasco, owner of Premier Energy Services, based in the Midland-Dodessa region, said he was not panic because many shale producers cover the price of oil they sell for six to 12 months. But he said that tariffs would increase the costs for the industry.
“It is a concern, because now its price has increased an additional 25 percent to buy a drill pipe. When that increases and the price of oil that is bought does not increase, well, it must be adjusted.”
