In a high-stakes visit to Riyadh last week, President Donald Trump urged Saudi Arabia to pump more oil to bring down global crude prices and rekindle a “trade war” of a different kind: one centered on oil. That’s because Trump’s call for cheaper oil may end up triggering a long-overdue reckoning for the US shale industry — and a symbolic end to the country’s 20-year sprint to the top of the global energy market. In the process, it could mark the arrival of a new phase in global oil geopolitics, where old superpowers reassert control and where the myth of perpetual US energy growth finally collides with economic and geological limits..Saudi Arabia and Russia, the leading OPEC+ powers, have reportedly aligned around a dual strategy of punishing member countries who have exceeded their production quotas and flooding the market to suppress US shale. But analysts warn the move could backfire, dealing a major blow to the very US oil producers who once symbolized Trump’s stated goal of "American energy dominance."With two consecutive output hikes already on the books for May and June, and a third reportedly on tap for July, OPEC+ appears emboldened and potentially gearing up for a price war the US may be ill-equipped to fight this time.Trump’s trademark “drill, baby drill” rhetoric appears increasingly disconnected from the reality on the ground. The tremors are already being felt in Midland, Calgary, and Washington..Conoco CEO says US oil growth at risk as ‘lower-for-longer’ prices threaten shale.END OF AN ERA?: Trump’s ‘Drill, Baby, Drill’ mantra meets maths as record US oil production falls.That’s because Lower 48 onshore oil production — the backbone of the ‘shale revolution’ — is expected to stall and even begin declining this year for the first time in two decades, regardless of who’s in the White House.“Trump may have just signed the death warrant for US oil’s run as the world’s largest producer,” said one Houston-based energy executive, pointing to how vulnerable shale firms have become to sub-$60 per barrel oil.According to the Dallas Fed’s latest survey, most US shale operators now need a break-even price of around $65 per barrel to keep production flat without increasing it. West Texas Intermediate (WTI) crude hovered around $61 this week, down sharply from last year’s levels..Ironically, Canadian oil sands producers are in a far more resilient position. Thanks to long-life assets and break-even costs under $25 per barrel, Canada’s oil sector —particularly in Alberta — may emerge as a rare winner in this emerging price war. Analysts suggest Canadian producers could withstand sustained low prices better than both American shale drillers and even some OPEC+ members.“This time around, Canadian oil might actually be the last man standing,” said one industry analyst..Internal OPEC+ sources told Reuters that the price target appears to be below $60 per barrel — enough to sow investor uncertainty and stall drilling in the US Permian Basin, which accounts for about half of all US production and virtually all of its growth.Though OPEC+ has not officially declared a price war, the signs are hard to ignore. But lower oil prices are a double-edged sword. They may ease inflationary pressures and provide consumers relief at the pump, but they also threaten the fiscal stability of major producers. The IMF estimates that Saudi Arabia needs oil prices above $90 per barrel to balance its budget; Russia requires at least $77.Meanwhile, back in the US, drillers are retreating. Rig counts are falling. Bankruptcies are expected to rise. Major players like ConocoPhillips have already warned that prices around $50 could prompt large-scale cutbacks, even among the biggest firms.“The playbook from a decade ago no longer works,” said Linhua Guan, CEO of Surge Energy America. “This is a different market, a different cost structure, and we’re up against a cartel willing to bleed for control.”
