As Oil Demand Wanes and OPEC+ Embraces Its Own Version of “Drill, Baby, Drill,” One of America’s Largest Oil Sources Could Be in Trouble

With US crude falling to $62 per barrel, America’s dream of “Drill Baby Drill” might face new challenges — and that could actually raise oil prices as a result. That’s because forecasts for weaker demand and rising supply from global cartel OPEC+ are putting pressure on US shale producers, who are already facing thinner profit margins and rising costs.

Shale shocked: Shale — which represents 65% to 70% of US production — is more complex and expensive than conventional oil extraction, so when prices fall into the $55 to $60 range, it becomes unprofitable much faster. If prices stay low, shale could be in for a wipeout, just years after the COVID-19 pandemic turned it on its head. With a dimmer global economic picture and OPEC+’s decision to gradually unwind production cuts, crude prices have been tumbling. Qatar’s energy minister warned that prices below $60 would trigger investment declines and leave the world short on power. This forecast arrives as both OPEC and the International Energy Agency cut their outlooks for US output after oil hit its lowest levels since 2021.

• US shale producers now need roughly $65 per barrel to drill profitably, while Saudi Arabia and Russia’s production costs hover around $5 and $20 per barrel, respectively.
• OPEC’s market dominance has eroded massively — from 40% of global supply a decade ago to under 25% today — while America’s share has risen to 20%.

In It to Drill It

Production woes are also dragging down shale company stock values — leaving investors drilling for answers. Diamondback EnergyFANG

, the largest independent producer in the Permian Basin (America’s top oil-producing region), has already scaled back operations, warning that OPEC+ increasing oil output and global economic uncertainty have brought US shale to a “tipping point.” Coterra EnergyCTRA

, which operates across three major basins, updated its three-year outlook to emphasize capital discipline with a reinvestment rate below 50% — signaling an industry-wide pivot toward financial caution over aggressive expansion.

• In the past year, OccidentalOXY
  , ConocoPhillipsCOP
  , and ExxonMobilXOM
  have seen their stocks plummet 34%, 27%, and 11%, respectively.
• Similarly, DevonDVN
  is dialing back drilling in response to market volatility, while Coterra has reduced its oil-directed capital spending for Q2 2025.

Future outlook remains murky: In response to the US slowdown, OPEC+ members — led by Saudi Arabia and Russia — are deliberately ramping up production to reclaim market share. Conoco CEO Ryan Lance noted, “Shale is maturing,” and believes US shale production still has room to grow — but not if oil prices hover around $50 per barrel. He also added that further price gains might just help American companies to get drilling again — at least temporarily. With prices sliding and pressure rising, the era of “drill, baby, drill” is fading fast for America’s shale patch.