US tariff policies are already weighing on domestic oil industry

Donald Trump's tariff policies could seriously damage the US oil industry. Drillers cut the number of active oil rigs last week to 583. Meanwhile, major companies are reassessing high-cost projects.

For the past 15 years, the United States has been the world's largest crude producer due to American shale oil firms, but growth has now hit a wall.

To expand production, the companies need oil prices between the range of $60–71 per barre, yet the current US benchmark sits at just $63. So, lots of new wells will not be drilled, and even major producers will focus only on their most profitable fields.

The International Energy Agency (IEA) has downgraded its forecast for US shale oil production growth in 2025 by 21.21% to 260,000 barrels per day (bpd). The total volume of US crude output is expected to reach 13.48 million bpd.

However, a more significant impact will be reduced investment in oil and gas projects. Major producers face substantial capital commitments, including dividend payments and share buybacks. These companies require an oil price between $78 and $88 per barrel to sustain operations.