Latest news with #ScottSheffield
Daily Mail
7 days ago
- Business
- Daily Mail
America's energy revolution goes from boom to bust after Trump's tariffs and sneaky move by Saudi Arabia
Oil bosses have warned that America's energy boom is over, as Trump's tariffs raise production costs and crude prices fall thanks to an increase in production from Saudi Arabia. The shale revolution of the last few years delivered huge volumes of cheap oil and gas that powered the US economy and broke dependence on foreign imports from places such as Iran, Russia and Venezuela. Production hit record highs under President Joe Biden, but is now falling under Trump. The situation presents a direct contradiction to the President's pledges to 'drill baby drill' and assert America's 'energy dominance.' Trump's aggressive trade policies have pushed up the prices of vital materials needed for oil production such as steel, aluminum and casing. At the same time, oil prices are tumbling because the OPEC cartel has decided to flood the market by increasing production. OPEC is a group of oil-producing companies, including Saudi Arabia, the UAE and Iraq, that work together to influence the global oil market and maximize profit. Riyad's shock decision to pump more oil in recent months will threaten America's share of the global oil market, Scott Sheffield, the former head of shale driller Pioneer Natural Resources, told the Financial Times. 'Saudi is trying to regain market share and they'll probably get it over the next five years,' Sheffield explained. US shale producers need oil prices of around $65 a barrel to break even, according to the the Federal Reserve Bank of Dallas. But prices are currently $61.53 a barrel, down 23 percent from this year's high point. US shale producers, such as ExxonMobil and Chevron, are slashing capital expenditure by about $1.8 billion for this year, abandoning rigs, and slashing jobs. Chevron and BP have between them announced 15,000 job cuts across the globe. Bosses have warned the worst is still to come. 'In this environment, we drop the rigs and buy back stock,' Travis Stice, chair and CEO at Diamondback Energy, told the Financial Times. The west Texas-based producer warned earlier this month that US production has now peaked as oil prices continue to slide. 'Every single conversation I've had is that this oil price won't work,' Stice warned. Oil bosses Travis Stice (left) and Clay Gaspar (right) warned that US production is in trouble Other bosses have also laid out the reality of higher costs and lower profits. 'We're on high alert at this point,' Clay Gaspar, CEO at Devon Energy in Oklahoma City, told investors earlier this month. 'Everything is on the table as we move into a more distressed environment.' US oil output is expected to fall 1.1 percent in the next year, according to S&P Global Commodity Insights. This would mark the first annual decline in a decade, excluding 2020 when the pandemic collapsed demand and prices. This triggered a wave of bankruptcies across Texas and North Dakota.
Bloomberg
17-03-2025
- Business
- Bloomberg
The Oil Industry Is Over a Half-Empty Barrel
'Remember: The Barrel Is Always Half Full.' That's the message on a huge electronic billboard in Midland, Texas, the capital of the US shale oil revolution. The meaning is clear: Throughout booms and busts, American oilmen should always look to a brighter future. Yet, that upbeat spirit is nowhere to be seen today. Overwhelmingly, the industry sees the barrel as half empty. 'There's a lot less optimism,' Scott Sheffield, a shale pioneer, told me in Houston last week during CERAWeek by S&P Global, the annual gathering of the American energy industry. The gloom seems counterintuitive. Donald Trump has brought his 'drill, baby, drill' slogan back to the White House, and installed an industry insider as secretary of energy: oil executive Chris Wright. The mood at the annual jamboree that attracts about 10,000 executives, bankers and traders, should have been ebullient. It wasn't. True, in public, everyone is happy about eased regulations and the prospect of lower taxes, not to mention the subject of climate change becoming taboo for this administration. But in private, executives are far more worried about Trump's push for lower oil prices and the potential of a trade war-induced recession. If anyone in Houston needed a reminder, as the conference got underway, Trump spoke in Washington, saying he was 'very happy' with the drop in prices.
Bloomberg
11-03-2025
- Business
- Bloomberg
Shale Pioneer Sheffield Warns Oil Chiefs of Grim Times Ahead
Scott Sheffield, the retired shale impresario who built a fortune drilling for Permian Basin oil, has grim advice for former rivals as President Donald Trump pushes for 'drill baby drill' to bring down energy prices. 'You've really got to hunker down,' Sheffield said during a Bloomberg Television interview on the sidelines of CERAWeek by S&P Global conference on Tuesday. 'You may have to lay off some people. You've got to focus on your best prospects. We'll see what happens over the next two or three years.'
