Trump’s Low-Oil-Promise Splits U.S. Energy Sector: Shale Break-Even at $60, Survival Line at $40

TradingKey - The Trump administration’s pledge to boost U.S. crude output and lower oil prices is drawing fierce backlash from American shale producers. WTI crude has fallen 18% from its January peak and is now approaching the industry’s widely recognized break-even level of $60 per barrel, with shale executives warning that a drop to $40 would kill drilling activity.

During his campaign, President Donald Trump promised to “Drill, baby, drill” — expanding oil production to suppress prices and reduce energy costs for consumers amid persistently high inflation in the post-pandemic era.

As of Thursday, September 25, WTI crude trades at $64.64 per barrel, down about 10% year-to-date and 18% below its 2025 high of $79 in January.

2025 U.S. WTI Crude Oil Price, Source: TradingKey

A Dallas Fed survey released Wednesday, based on interviews with energy industry professionals, revealed rising private opposition to Trump’s energy agenda — with warnings that policy missteps are harming the world’s top oil-producing nation.

Energy executives complain that the administration’s stance on oil prices, tariffs on key commodities, and erratic decision-making is scaring off investors and increasing operational costs.

One executive said:

“The noise and chaos is deafening! Who wants to make a business decision in this unstable environment?”

Critics argue that the government operates with little understanding of shale economics. In practice, they say, it is aligning with OPEC by using supply strategies to push prices below economic thresholds — thereby undermining U.S. oil producers.

One respondent lamented:

“The US shale business is broken. What was once the world’s most dynamic energy engine has been gutted by political hostility and economic ignorance.”

The International Energy Agency (IEA) reported this month that global oil supply is expected to reach 105 million barrels per day (bpd) in 2025, while demand will be 103 million bpd. In 2026, supply will rise to 107 million bpd, with demand at 104 million bpd — indicating oversupply in both years.

Survey respondents expect oil prices to average $63/barrel by year-end, more than 7% lower than their forecast two months ago, and $67/barrel by 2027.

Industry insiders warn that if prices fall below $60/barrel, drilling becomes unprofitable. One respondent said the administration appears to be pushing for $40/barrel, at which point drilling would vanish.

An executive stated:

“We have begun the twilight of shale. The US isn’t running out of oil, but she sure is running out of $60 per barrel oil.”

The Dallas Fed’s quarterly survey tracks drilling activity in the southwestern U.S., including Texas, a major oil-producing state and a key Trump-supporting battleground in the 2024 election.

The report shows a 6.5% decline in Q3 drilling activity, slightly improved from Q2’s 8.1% drop. According to Baker Hughes, the number of active U.S. oil rigs has declined 13% year-to-date.

While Trump publicly supports the energy sector, industry leaders fear he may extend his attacks on clean energy to traditional fossil fuels.

Executives expressed concern that future policies could impose stricter methane penalties, permitting restrictions, and environmental reviews.

One respondent said:

“Day to day changes to energy policy is no way for us to win as a country. Investors are avoiding the energy sector due to the ‘stroke of pen’ risk that the federal government wields as it relates to long duration energy developments.”