Shale titan Harold Hamm isn’t mincing words — If oil prices stay this low, drilling in some of America’s prized shale fields could grind to a halt. —— March 14, 2025 - oilprice.com - forbes.com
Speaking at CERAWeek in Houston, the Continental Resources founder warned that with oil hovering near $65 a barrel, many U.S. fields are already on shaky ground.“When you get below the cost of supply, you can’t ‘drill, baby, drill. These low oil prices shut you down", Hamm said. Hamm also issued a warning to Chevron and Exxon, which have focused on greatly reducing oil production costs per barrel in the Permian with a massive ongoing infrastructure program yielding a relentless 10% annual increases in Permian production.
Hamm said, "America’s tight oil drillers in places like the Permian “need to be careful not to overproduce,” lest they unbalance the market, tank prices, and bring about another deep oil downturn. "It has to be done in a measured way or else we’ll kill the market."
ConocoPhillips CEO Ryan Lance warned that inflationary pressures are creeping back into the system, while investors are skittish about how Trump’s on-again, off-again trade policies will impact energy markets.
BlackRock’s Larry Fink put it bluntly: “The only way we can navigate this—it’s not by cutting because cutting is going to destroy the economy. We must grow the economy.”
Occidental Petroleum CEO Vicki Hollub, has predicted current low oil prices will lead American crude production to peak as soon as 2027 before beginning a slow decline.
For now, the low oil prices are great for consumers. It’s not so great for the companies pulling it out of the ground. If prices stay low, even with regulatory relief, the shale boom may finally hit a wall.
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Some have alleged Donald Trump recently reached an agreement with the Saudis to increase oil production and put America's independent shale oil producers out of business for not being sufficiently loyal.
Trump has also recently commented how wonderful it would be to take advantage of low cost Russian oil imports to replace oil imports from Canada, which is a very hostile nation to US interests.
The ultimate irony is US consumers don't even recognize current oil price levels as low. |
