U.S. Oil Output Faces Risk of Decline Amid Tariff Uncertainty

The U.S. oil sector, a cornerstone of Trump’s energy agenda, is showing signs of vulnerability as trade policy uncertainty and softer prices threaten production growth. 

Analysts now warn that output could stall or even reverse in 2025 or 2026, despite earlier projections of modest gains.

The U.S. Energy Information Administration recently trimmed its forecast to 2.2% growth this year and just 0.4% in 2026, reflecting caution before Trump’s April 2 tariff announcement.

Barclays’ Amarpreet Singh noted that current prices—WTI at $62.43 today after dipping to $58 last week—could trigger a decline this year, as they hover near or below breakeven levels for new wells.

Wood Mackenzie’s Ann-Louise Hittle said it would take sustained lower prices to significantly cut output, given the 6-9 month lag in production response.

S&P Global Commodity Insights sees only a 150,000 barrel-per-day rise from onshore wells in 2025 but warns a drop to $50 could slash output by over a million barrels daily within a year.

Trump’s 10% baseline tariff and hefty China levies, with uncertainty post the 90-day pause, could dampen global demand, further pressuring oil prices and U.S. production prospects.