New Report Projects $95 Future Breakeven Price For U.S. Shale Oil

An oilfield crew, contracted by the Railroad Commission of Texas (RRC), works a service rig during a state-funded oil well plugging operation in Midland, Texas, US, on Thursday, Sept. 25, 2025. Oil fluctuated in choppy trading as tensions between Russia and NATO intensified, with European leaders warning the Kremlin that Western military alliance is ready to respond with force to violations of its airspace. Photographer: Eli Hartman/Bloomberg

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A new report from big energy data analytics firm Enverus finds that the average breakeven price for new shale wells in the United States currently sits at $70 per barrel. That’s a troubling finding given that the domestic WTI index price has recently hovered in the mid-$60s amid what most consider to be an oversupplied global market for crude.

Major Challenges Ahead For U.S. Shale

But Enverus finds that things are only likely to become more challenging from here. That breakeven price for U.S. shale is set to keep rising into the future, Enverus finds, and by quite a bit. By 2035, Enverus analysts project the marginal breakeven price will rise to $95 per barrel amid a shift from proven economic drilling inventory to more speculative prospects.

“As core shale oil inventory in the U.S. depletes, the industry is entering a new era of higher costs and more complex development. This shift will reshape the cost curve and redefine investment strategies across the continent,” Alex Ljubojevic, director at Enverus Intelligence Research said.

Liubojevic notes that the maturation of U.S. shale plays and slowing of their pace of production growth has significant implications for the industry’s ongoing ability to meet rising oil demand. “North America’s dominance in supplying global oil demand growth is waning,” he says. “Over the next decade, its contribution to consumption growth is expected to fall below 50% — a stark contrast to the previous 10 years when it supplied more than 100%.”

While the predicted rise in marginal costs across a decade seems large in absolute terms, some will point out that the percentage would fall right in line with projections of global inflation and economic growth across the same time frame. That is accurate, but the percentage increases in costs and prices in this infamously cyclical industry have seldom progressed in line with other economic measures.

The Permian Basin in West Texas and Southeast New Mexico and the Canadian oil sands have long reigned as the lowest-cost sources of scalable North American oil supply growth, and Enverus sees that dynamic continuing uninterrupted. But no one should think those prolific play areas are immune to the impacts of market dynamics or rapidly shifting government policies.

Shale Executives Weigh In

That reality is illustrated by responses by shale executives to the Dallas Federal Reserve bank’s third quarter survey of energy producers, which was released the day after the Enverus report. Many of the executives, whose survey responses are held anonymous, see an industry already in distress amid a set of unfavorable factors.

“There are a variety of issues affecting our business,” One executive says. “First, excess in the global oil market is restraining oil prices near term. Second, there is continued uncertainty from OPEC+ unwinding production cuts. Third, trade and tariff changes and the resulting geopolitical tensions.”

Predictability and stability in market factors and government policies have always been key factors to success in the domestic oil and gas industry. High volatility in either area has frequently resulted in downturns in the oil business, and one key sign of a possible downturn has been evident in recent weeks as many companies in both the industry itself and among its service sector have begun to announce significant layoffs of personnel.

One executive lays much of the blame on President Donald Trump and his tariff policies, complaining, “The administration is pushing for $40 per barrel crude oil, and with tariffs on foreign tubular goods, [input] prices are up, and drilling is going to disappear. The oil industry is once again going to lose valuable employees.” Another puts it more bluntly: “The U.S. shale business is broken. What was once the world’s most dynamic energy engine has been gutted by political hostility and economic ignorance.”

These are not invalid complaints. There is no question that the dramatic fluctuations in tariff policies by the Trump White House have both increased oilfield costs – especially as they apply to tubular goods and other steel and aluminum supplies and equipment – and diminished the ability of oil company management teams to plan their business activities.

That duly noted, it must be said that the slowing of U.S. production growth goes back well into the Biden administration’s four years in office and should actually put upwards pressure on global oil prices with all other factors being equal. But all other factors haven’t remained equal across the world, most notably the decision by the OPEC+ oil cartel to pour additional volumes of their own crude onto the market starting more than a year ago. The slowdown of economic growth in China and other Asian economic powerhouses has also placed significant downward pressure on prices.

Another enduring reality in the United States is that the ability of any U.S. president to force changes to global oil prices is extremely limited. We saw this during the Biden years when former President Joe Biden, eager to influence the 2022 mid-term elections, implemented a program to pour 1 million barrels per day from the U.S. Strategic Petroleum Reserve onto the market for 180 days. Whatever impact that politically motivated use of what is intended to serve as a national security asset had on global prices was hard to measure and marginal at best.

Certainly, President Trump has talked at length about wanting oil prices to continue their downward trend. But he possesses little real power to make that happen, and the reality is that that crude prices have been on a steady downward trend which began in mid-2022, not on January 20, 2025.

The Future Of U.S. Shale

The oil business in the United States has always been a tough endeavor filled with risk and uncertainty. That is as true today as it was when Edwin Drake brought in the first successful well near Titusville, Pennsylvania in 1859.

It is also a highly cyclical business, and a regulated one which is heavily impacted by government policies at the local, state, and federal levels, and by geopolitical risks which are a constant factor.

No one should argue that President Trump’s polices – especially his ever-shifting tariff actions – have not raised the risk and uncertainty in the U.S. shale sector this year. But there are larger, more global factors also at play today, and, as the Enverus analysis shows, life in the U.S. shale patch seems likely to continue growing more difficult long after the second Trump presidency comes to an end in January, 2029. As the old saying goes, if any of this were easy, everybody would be doing it.