Core Insights - The era of declining breakeven costs for the U.S. shale oil industry is coming to an end, with rising costs and depleting core reserves expected to weaken the U.S.'s influence on global oil supply over the next decade [1][2] - The marginal cost of U.S. crude oil is projected to rise from $70 per barrel to approximately $95 per barrel by around 2035, primarily due to the shift from economically proven reserves to higher-risk exploration areas [1] - North America's contribution to global oil demand growth is expected to drop below 50% in the next decade, contrasting sharply with the previous decade's contribution of over 100% [1] Industry Dynamics - The U.S. shale oil sector is entering a high-cost, complex development era as core reserves are exhausted, leading to a reshaping of the North American oil cost curve and redefining investment strategies across the industry [2] - Companies are currently in a "wait-and-see" mode due to low oil prices, adjusting capital expenditure budgets and relying on efficiency improvements to maintain production levels [2] - Major shale producers are indicating that production peaks have been reached, with Diamondback Energy reducing its 2025 capital budget by $100 million to a range of $3.4 billion to $3.6 billion, citing market volatility and uncertainty [2] Regional Insights - The Permian Basin's oil and gas activities are declining due to rising costs and increased uncertainty, with 57% of executives believing that regulatory changes since January 2025 have only marginally reduced breakeven costs [2][3] - Executives express concerns that government policies are negatively impacting the shale oil industry, with some attributing the industry's struggles to political hostility and economic ignorance from both previous and current administrations [3]