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U.S. Shale Production Faces Plateau as Oil Prices Slip Below Breakeven Threshold

ConocoPhillips and Occidental CEOs warn of stalled growth and potential decline in U.S. shale output as prices hover in low $60s, with breakeven economics set at $65 per barrel.

ConocoPhillips CEO Ryan Lance walks on stage as top energy executives and ministers meet for the annual Gastech conference in Houston, Texas, U.S., September 17, 2024. REUTERS/Callaghan O'Hare/File Photo
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Overview

  • U.S. shale production is expected to plateau at oil prices in the low $60s and decline if prices drop into the $50s, according to ConocoPhillips CEO Ryan Lance.
  • The breakeven price for profitably drilling new shale wells remains around $65 per barrel, as confirmed by the Dallas Fed Energy Survey for Q1 2025.
  • Occidental CEO Vicki Hollub highlighted that market volatility and low prices could accelerate the peak of U.S. oil production, potentially arriving sooner than previously anticipated.
  • Without technological breakthroughs, U.S. shale production is forecast to see only modest growth at $65–75 oil prices, with a plateau likely by the end of the decade.
  • The Permian Basin, the leading region for U.S. shale growth, is projected to experience minimal expansion this year under the current price environment.