Trump’s Push for Cheap Oil Backfires on U.S. Shale Industry There’s a common belief that the Trump administration is pushing for lower oil prices, partly to boost approval ratings among American drivers through cheaper gasoline (in some states, prices have dropped below $3 per gallon — roughly 80 cents per liter or about 62 rubles in Russian terms). However, industry analysts warn that WTI crude prices below $65 per barrel are severely hurting the U.S. shale sector — and WTI is currently trading at $63. Just one year ago, $63 would have been acceptable to U.S. producers. Today, it’s not. Rising costs for steel, labor, and fracking materials have pushed break-even prices in major basins closer to $70. The average break-even price for Permian producers is now slowly approaching the mid-$60s — up from around $50 just two years ago. New tariffs on imported equipment have further inflated expenses. For example, pipes imported from China and Vietnam have risen by 20% over the past year. Rystad Energy reported that the break-even cost for new horizontal wells in key shale basins is now nearing $68 per barrel. Liberty Energy, a major fracking services provider, warned it may cut its crew workforce by 15% by August. Coterra Energy noted plans to reduce drilling activity in the Permian Basin by 30% in the second half of 2025. In short, the U.S. oil industry now needs at least $68–70 per barrel for WTI — Brent should be priced at $70–73, considering the current discount between the two grades. Analysts say the market outlook hinges on Saudi Arabia and its Gulf partners’ strategy. As usual, there are two scenarios: 1. Create a small deficit, gradually pushing prices toward $70–75. 2. Aggressively increase OPEC+ output to push prices below $60, forcing U.S. producers to cut back and then reclaiming lost market share. Right now, the current price near $65 per barrel fits neither scenario — leaving the market stuck in limbo.