U.S. onshore oil production may have reached its peak and is likely to decline due to the recent drop in crude prices, potentially threatening the country’s status as the world’s leading fossil fuel producer and undermining its energy independence, according to a letter from Diamondback Energy CEO Travis Stice to shareholders this week.
Crude prices in the U.S. have fallen roughly 17% this year, driven by recession concerns tied to President Donald Trump’s tariffs, which are weighing on demand forecasts. Meanwhile, OPEC+—led by Saudi Arabia—has been ramping up output, adding more supply to the global market.
Stice noted that, when adjusted for inflation, U.S. oil prices have been this low in only two other quarters since 2004—excluding the sharp collapse during the 2020 COVID-19 crisis.
“At today’s commodity prices, we believe U.S. oil production has reached an inflection point,” Stice wrote in Monday’s letter. “It’s likely that domestic onshore production has already peaked and will begin to decline this quarter,” he added, citing a slowdown in drilling activity.
Diamondback Energy is a major independent oil and gas operator in the Permian Basin—America’s most productive oil region. The company ranks as the third-largest producer in the Permian and sixth in the Lower 48 states, according to data from Enverus.
On Tuesday, U.S. crude futures jumped more than 4% to $59.56 per barrel amid growing expectations of a production drop.
A threat to energy security
The U.S. shale boom over the past decade and a half catapulted the country to the top of global fossil fuel production, outpacing even Saudi Arabia and Russia. That growth brought unprecedented energy security, Stice emphasized.
“This shift has reshaped the U.S. economy and delivered an energy independence that seemed unattainable at the turn of the century,” he said. “But today’s price environment, combined with ongoing market volatility and broader economic uncertainty, threatens to undo those gains.”
