Oil Prices Hit A Four-Year Low
Oil prices dropped Monday to levels not seen since April 2021, setting off alarms across the global energy sector. What sparked the plunge? A rapid-fire one-two punch: President Donald Trump’s sweeping new tariffs and OPEC’s unexpected decision to raise oil production by 411,000 barrels per day. While experts debate which of these seismic moves triggered the sharp decline more forcefully, the fallout is becoming harder to ignore — especially for the U.S. oil and gas industry.
It began with a bold move from President Trump last Wednesday. In a sweeping economic maneuver, he slapped tariffs on nearly all U.S. trading partners, reigniting debates about trade wars and their cascading effects on global demand. The very next day, OPEC announced it would increase oil output, dumping more crude into an already glutted market. By Monday, West Texas Intermediate (WTI) crude was trading under $60 per barrel — down 10% in a month and 4% in a single day.
For Trump, the goal is clear: he’s aiming for $50 oil, a price point he believes will provide relief at the pump and ease inflationary pressures. But energy analysts say that target could carry significant consequences. David Blackmon, writing on his Energy Absurdities Substack, warns that the current price level is already unsustainable for most U.S. shale operations. “$60 per barrel is well below the break-even prices of most shale plays,” he noted. At that price, producers aren’t just losing money — they’re making decisions about layoffs and mothballing drilling rigs.
The U.S. shale industry, once the engine of American energy dominance, is no longer in its explosive growth phase. Blackmon characterizes today’s environment as the “build, baby build” phase — not driven by new drilling, but by infrastructure investment and process improvement.
That maturation, while stabilizing in some respects, also limits the industry’s flexibility when prices fall fast. If sub-$60 oil persists, Blackmon predicts frack crews will idle, service companies will shrink, and job losses will mount.
Meanwhile, OPEC’s decision to increase production in the face of falling prices has divided analysts. Robert Rapier, a chemical engineer and editor of Shale Magazine, believes the cartel is testing whether it can reclaim market share by pricing out U.S. competitors. It’s a move reminiscent of 2014, when OPEC tried the same strategy and lost — badly — as U.S. shale producers adapted and thrived. But this time, Rapier says, the shale sweet spots are drying up and the economics are less favorable than they were a decade ago.
Others see a different story. Doomberg, a high-profile Substack publication, argues OPEC’s move isn’t strategic at all — it’s a sign of resignation. In their analysis titled Punctuated Equilibrium, they describe the output hike as a “surrender,” suggesting OPEC’s failure to adapt to the shale revolution has already eroded its power. With its grip on the market slipping, Doomberg contends, the cartel’s influence is waning — even as it floods the market.
Trump’s approach is unconventional, but calculated. By targeting lower energy prices through a mix of trade pressure and deregulation, his administration hopes to counteract inflation and drive consumer spending. But the structural shift in the U.S. economy — where the nation is now a net exporter of oil and petroleum products — means falling prices now undercut trade balances instead of improving them.
Rapier warns that cheap oil doesn’t bring the benefits it once did. “Trying to fix this with tariffs… you’re going the wrong direction,” he said, emphasizing that today’s America loses more than it gains when energy prices fall. While lower costs might benefit airlines and logistics, the broader economy — tightly linked to domestic energy — may suffer.