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Two large American shale producers said they would cut capital expenditures on Monday in response to oil prices slipping, prompting industry warnings that US production could peak and begin to fall.
Diamondback Energy, one of the largest producers in the Permian Basin in West Texas, the US’s largest oilfield, said it estimated that the number of US fracking crews has fallen 15% this year and will continue to decline unless prices change rapidly.
The company said it cut its capital budget for 2025 from $3.8 billion to $4.2 billion at $400 million, dropping three drilling rigs. Diamondback expects the number of drilling rigs operating in the US will fall by 10% by the end of June, with a further decline in the third quarter.
“As a result of these cuts in activities, U.S. land oil production could peak and this quarter could begin to decline,” said Travis Stice, chief executive of Diamondback.
Houston-based energy company Coterra Energy said it reduced capital expenditures in 2025 from $2.1 billion to $2.4 billion, down from 10 Permian in the second half of the year to seven rigs.
Oil prices fell more than a dollar a barrel on Monday to settle at their first four-year low as traders responded to a decision to announce a second consecutive year of monthly production growth over the weekend. International benchmark Brent Crude settled at $60.23 per barrel, while West Texas intermediates closed at $57.13 a barrel.
A combination of increased supply of OPEC and the fear that US trade tariffs will undermine the global economy led Brent crude prices to rank fifth in April, falling to the largest month of the month in almost three and a half years.
US shale producers, who weigh less than $60 per barrel, struggle to make money, especially in parts of the country’s aging basin, are forced to potentially stop drilling, lay drilling rigs and cut down on jobs. Analysts said the US will lose market share for low-cost OPEC+ producers at current prices.
“If recent guidance from two major US operators are held throughout the revenue season, shale production is set to decline from the remainder of the year to 2026. OPEC+ will ultimately open the door to regaining market share.”
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US President Donald Trump, who campaigned last year on a platform that unleashes US energy control, has welcomed the fall in oil prices.
He proposed on Monday that oil prices slipping could help put an end to the war in Ukraine.
“Russia now has oil prices and I think oil is falling. I think we are in a good position to settle down,” Trump told reporters in the oval office. “They want to calm down. Ukraine want to calm down. If I weren’t the president, no one would be able to calm down.”
Additional Reports by Myles McCormick
