The $50 dilemma
President Trump's push for $50 per barrel oil prices has put US shale producers in an uncomfortable position. While lower fuel costs would benefit American consumers, the math simply does not work for the domestic oil industry.
WTI crude is currently trading at $59.71 per barrel, with Brent at $63.98. Trump's target would require prices to fall another 16% from current levels.
Breakeven costs tell the story
In the Permian Basin, the crown jewel of American energy production, breakeven prices hover between $62 and $64 per barrel, according to data from the Dallas Federal Reserve. This means many producers would lose money on every barrel extracted if prices hit Trump's target.
BCA Research analysts have flagged that achieving the $50 target could be "problematic" for US shale producers, noting that breakeven costs for new wells sit at $64 per barrel.
Not all wells are created equal. Some can turn a profit below $60 per barrel while others need $70 or more to break even.
Production at risk
"$50 oil is really where production would start to fall," said Matthew Bernstein, Vice President of North America oil and gas at Rystad Energy.
The numbers paint a stark picture:
- Rystad forecasts onshore US output declining by around 150,000 barrels per day through 2026 in a $50 price environment
- Kpler projects a 700,000 bpd drop in output by the end of 2026 if WTI falls to $50 and stays there
- Johannes Rauball, a Kpler analyst, warned that a "severe, sustained $50 scenario would cripple US crude supply"
Winners and losers
The impact would not be uniform across the industry. Companies like EOG Resources and Diamondback Energy have "plenty of room to spare" even below $50 per barrel, thanks to their low-cost operations.
By contrast, Ovintiv, Marathon Oil, Murphy Oil, and Occidental Petroleum would likely report losses at or below that level.
The integrated majors have more flexibility. Exxon and Chevron have both targeted global breakeven costs of around $30 per barrel by 2030.
Current outlook
US production climbed to a record 13.61 million barrels per day in 2025 but is set to decline to 13.53 million bpd in 2026, according to the Energy Information Administration.
The EIA projects Brent crude will average $55 per barrel in Q1 2026 and remain at that level throughout the year. Goldman Sachs forecasts Brent and WTI at $56 and $52 respectively.
There is some optimism beyond 2026. Analysts expect prices to recover in 2027 and 2028, with Goldman Sachs projecting Brent and WTI to reach $80 and $76 per barrel by 2028.
For now, US shale producers face a difficult balancing act between a White House that wants cheaper oil and an industry that needs higher prices to survive.