According to the latest analysis, there is no specific time in 2025 that can be considered the “end of the road” for the US shale oil industry. Instead, this development is symbolic, reflecting the oil price strategy of the OPEC+ alliance (led by Russia and Saudi Arabia) that is creating heavy pressure on US producers. However, the shale oil industry has not completely collapsed.
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| Russia and Saudi Arabia increase pressure, but the US shale oil industry is not yet over |
OPEC+ continuously adjusts production, aiming to regain market share, especially in the US market. This forces many shale oil companies to cut investment and reduce the number of operating rigs.
The cost of new oil production in the US is currently around $65/barrel, much higher than the $3–5/barrel of Saudi Arabia and the $10–20/barrel of Russia. This puts US companies at a huge disadvantage in the oil price competition.
Gradual decline in production
According to newly released data, the US shale oil industry has cut $1.8 billion in capital investment in just two quarters, the number of drilling rigs has decreased by about 10%, while hydraulic drilling teams have also lost 76 units compared to the beginning of the year.
The US Energy Information Administration (EIA) forecasts that oil production will fall from 13.6 million barrels/day (2025) to 13.1 million barrels/day by the end of 2026. This will be the first decline since 2015 (excluding the pandemic period).
US shale oil's defense capabilities
Despite being squeezed, the shale oil industry has shown resilience thanks to improved drilling technology and cost optimization. US production still peaked at 20.96 million barrels per day in May and remained close to 20.8 million barrels per day in August 2025. (AInvest)
Conclusion
The US shale oil industry is facing its biggest challenge since the “oil price war” in 2020. Under pressure from Russia and Saudi Arabia, production and investment are declining. However, thanks to its ability to adapt and maintain exploitation efficiency, US shale oil is still alive and will not be “completely finished” in 2025.
Source: Financial Times.
