US Shale Industry Set to Boost Oil Output Despite Falling Prices, Says Energy Secretary. 'The Economics Of Shale Don’t Work,' Says Expert - Liberty Energy (NYSE:LBRT), Goldman Sachs Group (NYSE:GS)

The U.S. shale sector is capable of ramping up oil production even if prices fall to $50 per barrel, according to U.S. Energy Secretary, Chris Wright.

What Happened: Wright, formerly the CEO of Liberty Energy LBRT, is optimistic about the sector’s potential to innovate and achieve efficiency gains, thereby enabling higher production at lower prices, reported The Financial Times.

He said that they were going to see the same kind of market dynamics at that time. He explained that new supply would drive prices down, companies would innovate and lower their prices, and consumers and suppliers would fluctuate between options.

the U.S. shale sector is well-positioned to fulfill Donald Trump's call to “drill, baby, drill,” he added.

However, he anticipates an industry disruption similar to the 2014 price war between OPEC producers and the shale industry. "There were a lot of bankruptcies. There was a lot of disruption, but the end result was far lower costs to produce a barrel of oil," Wright told the publication.

A lot of U.S. oil executives are likely to disagree with Wright’s remarks amid fear that lower oil prices could reduce profits and force cutbacks in drilling activity, despite President Trump’s push for increased production.

Why It Matters: This statement comes after a sharp decline in oil prices, with Brent crude dropping below $70 last week for only the third time since Russia’s full-scale invasion of Ukraine in 2022. The recent decline in oil prices has been influenced by several factors, including trade policies and OPEC+ production increases.

In March 2025, West Texas Intermediate crude oil prices fell 6% to reach multi-year lows. President Trump’s 25% tariff on energy imports from Canada and Mexico disrupted trade flows and raised concerns about slower global growth and reduced energy demand.

Award-winning energy historian, Daniel Yergin told the Financial Times, "at $50 a barrel the economics of shale don't work.”

Furthermore, Goldman Sachs GS warned that a proposed 10% U.S. oil tariff could lead to a $10 billion annual loss for foreign producers, posing a significant threat to Canadian and Latin American heavy crude suppliers that depend on U.S. refiners.

Noble Corporation plc NE plunged over 22% during the last 30 days to close at $24.71 on Friday, while Western Midstream Partners WES declined 4.07% during the same period.