Crude Prices Plunge, Then Rebound Amid Trade War Chaos
The oil market has been shaken by President Trump’s volatile tariff policy, with U.S. crude oil plunging to $55.12 — a 23% drop from early April — before bouncing back to $62.35 following a sudden 90-day tariff pause for most countries. However, with China still targeted by a 125% tariff, West Texas Intermediate (WTI) remains under pressure, and investor confidence is slipping fast.
Energy Sector Faces Uncertainty as Investment Stalls
Experts warn of “extreme uncertainty” in the U.S. oil sector, as producers hesitate to commit to new drilling. “There’s a pause — the uncertainty has not gone away,” said Jim Burkhard of S&P Global Commodity Insights. Industry insiders stress that the unpredictable nature of tariff decisions is making it impossible to forecast long-term investment needs.
Shale Producers Brace for Cutbacks
Shale oil companies, which transformed the U.S. into the world’s top crude producer, may be forced to scale back. Most require crude prices above $65 per barrel to remain profitable, and the current low-$60s range threatens output. According to Rystad Energy’s Susan Bell, up to 50 rigs could be cut immediately if prices don’t stabilize.
Steel Tariffs Add Cost Pressures
Trump’s steel tariffs could increase well costs by 10%, further straining U.S. producers already grappling with falling oil prices. “It’s another hit,” Burkhard said, adding to an already fragile situation. Lower prices combined with rising costs make new drilling less viable, weakening the administration’s “drill, baby, drill” narrative.
Executives Sound Alarm on Policy Volatility
Industry leaders are openly criticizing the White House. In responses to the Dallas Fed Energy Survey, one executive described the administration’s approach as a “disaster for commodity markets.” Another said, “I have never felt more uncertainty about our business in my entire 40-plus-year career.”
WTI Outlook Dims as Wall Street Reacts
Goldman Sachs lowered its WTI forecast to $58 by December 2025 and $51 for 2026. If prices fall into the $50–$55 range, U.S. onshore oil growth could stall completely, according to Macquarie’s Walt Chancellor. Liberty Energy, the company founded by U.S. Energy Secretary Chris Wright, has seen its stock fall 32% since April 2.
White House Pushes for Long-Term Strategy
Despite the backlash, Energy Secretary Wright argued that Trump’s broader strategy will eventually help producers by removing red tape and enabling more pipelines and exports. “What you’re seeing right now is the fear and uncertainty as the sausage is being made,” he said on CNBC.
