Travis Stice, CEO of Diamondback Energy, has warned shareholders that U.S. onshore oil production may have peaked and is likely to decline due to falling crude prices, jeopardizing the nation’s status as the world’s largest fossil fuel producer and its energy security. Crude oil prices have dropped approximately 17% this year, influenced by recession concerns linked to President Trump’s tariffs, while OPEC+ producers, primarily Saudi Arabia, are increasing supply. Stice noted that front-month oil prices are at their lowest since 2004—excluding the pandemic-affected year of 2020—which he considers a warning sign for U.S. oil production.
Diamondback, a significant player in the Permian Basin and the sixth largest oil producer in the continental U.S., has experienced a 15% decrease in shale fracking crews and anticipates further declines in rig counts. Stice stated that the capital needed to sustain production levels might become unmanageable if prices continue to fall. He indicated that the current economic climate and price volatility threaten the progress made over the past 15 years, which transformed the U.S. into a leading fossil fuel producer, surpassing Saudi Arabia and Russia.
In light of these challenges, Diamondback has revised its capital budget, reducing it by $400 million to between $3.4 billion and $3.8 billion for the year, attributing some cost increases to Trump’s steel tariffs. The company plans to drill between 385 to 435 wells this year, signaling a strategic slowdown akin to “taking the foot off the accelerator.” Stice emphasized that they are prepared to adjust operations based on market conditions, indicating a cautious approach moving forward.
Note: The image is for illustrative purposes only and is not the original image associated with the presented article. Due to copyright reasons, we are unable to use the original images. However, you can still enjoy the accurate and up-to-date content and information provided.
