【By Observer Net, Wang Yi】"The noise and chaos are deafening! Who wants to make business decisions in such an unstable environment?"

This is the anonymous complaint from a senior executive of an American shale oil exploration and production company during an interview with the Federal Reserve Bank of Dallas. Facing the energy and trade policies of the Trump administration, the U.S. shale industry is experiencing unprecedented anxiety.

The survey shows that U.S. shale oil executives generally believe that after Trump returned to the White House, on one hand he loudly declared a "national energy emergency," promising to fully "drill" and lower consumers' energy costs; on the other hand, he directly "crushed" this industry, which was once seen as a pillar of "energy independence," through tariffs, low-price strategies, and arbitrary and changeable policies.

A senior executive stated bluntly that the Trump administration "knows almost nothing about shale oil economics," and its actions "are equivalent to standing with OPEC, depressing oil prices below the economic threshold by manipulating supply, and completely crushing U.S. producers."

"The U.S. shale oil business has collapsed," said one respondent, "this once the most dynamic energy engine in the world has been destroyed by political hostility and economic ignorance."

Some experts told Bloomberg that as OPEC increases production and Trump encourages the U.S. to significantly increase production to "solidify energy dominance," the global oil market will face oversupply, resulting in falling oil prices.

The Financial Times reported on September 25 that since the beginning of this year, the U.S. benchmark crude oil West Texas Intermediate (WTI) has fallen 18%.

Price trends of the U.S. benchmark crude oil West Texas Intermediate (WTI) from December 2024 onwards. Bloomberg map

Executives interviewed in the survey said that if the oil price falls below $60 per barrel, their business would be in loss. They expect WTI prices to remain around $63 per barrel by the end of this year, and reach $67 per barrel by 2027. However, the executives pointed out that the surplus in the global market in the short term is constraining prices and undermining profitability and dividends, and they are also concerned about Trump's goal of lowering oil prices.

"The Trump administration is pushing oil prices down to $40 per barrel," said one executive. At this price, "drilling activities will disappear."

At the same time, Trump's trade policies have further worsened the situation for the industry. Since June, the U.S. has imposed a 50% tariff on steel and aluminum, directly increasing costs.

A boss of a petroleum and natural gas services company complained that his industry is suffering from "cost increases caused by tariffs." Another respondent wrote that his sub-industry is "bleeding" because of this.

The Dallas Federal Reserve Bank's quarterly survey tracks drilling activity in the U.S. Southwest. The survey found that shale drilling activity in the U.S. Southwest fell by 6.5% in the third quarter, although it slowed compared to an 8.1% decline in the previous quarter, the overall outlook has deteriorated sharply. Among the 139 companies surveyed, the proportion holding negative expectations nearly tripled, dropping 17.6%.

Although Trump claims to support fossil fuels, the industry executives say they are worried that Trump's attacks on renewable energy may ultimately backfire on the shale industry.

After taking office, Trump's second administration significantly cut tax incentives for clean energy provided by the previous Biden administration, halted the Empire Wind 1 wind project of Norway's Equinor and large projects like "Revolution Wind" by Danish wind power developer Ørsted.

A shale industry executive said they are worried that future governments may strengthen penalties for methane emissions, tighten permits, and environmental reviews.

They lamented, "The attacks on renewable energy today may eventually come back to haunt us."

This article is an exclusive article from Observer Net. Reproduction without permission is prohibited.

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