US President Donald Trump’s efforts to boost the nation’s oil production have led to concerns among oil industry experts that companies will need to cut output and jobs due to a double whammy of higher crude output from OPEC and tariffs on steel and oil-drilling gear.
The US is the world’s largest oil producer, but its oil prices have slumped to near $55 a barrel this month, making it difficult for companies to drill profitably unless oil prices rise above $65 a barrel. New tariffs on trading partners have also made it more expensive to buy steel and equipment, further discouraging drilling.
Industry watchers say that even if oil prices stay below $60 a barrel, the rig count is expected to drop significantly, with some estimates suggesting a 50% decline. Companies such as Chevron and SLB have already announced layoffs to cut costs, while others are bracing for more cuts unless oil prices rise substantially.
The US Energy Information Administration has sharply reduced its forecast of US crude prices to $63.88 per barrel for 2025, citing global trade policy and higher OPEC production. The agency also predicts a decrease in global oil consumption for 2025, which could further reduce demand and lead to lower oil prices.
While some companies have become more efficient and can drill wells at a lower cost, the overall impact of tariffs and higher OPEC output is expected to be significant, leading many experts to predict that US oil production will slow down unless oil prices rise significantly.
Source: https://www.reuters.com/business/energy/opec-output-hikes-trade-wars-have-us-oil-producers-wary-drill-baby-drill-2025-04-11