U.S. Oil Hits its Peak in 2024

It’s quite interesting that Donald J. Trump stated unequivocally last week, that America doesn’t need anything from Canada, yet the EIA, the US Energy Information Agency suggested this week that oil production in the U.S. may have peaked.

It was assumed that oil from fracking would diminish within a few years, however it now seems that that particular prognostication was a tad optimistic.

According to the BOE Report from the Q1 letter states:

“We believe we are at a tipping point in U.S. oil production,” and; “We expect activity to slow and oil production to decline”.

Diamondback’s CEO Stice references the selloff in oil prices and estimates that the US frac crew count is already down – 15% this year, with the Permian Basin crew count down -20% from its January peak, with both expected to decline further.

He further stated, “It is likely that US onshore oil production has peaked and will begin to decline this quarter.” Simply put, with commodity prices where they are, no amounto of efficiency is expected to be able to offset the shrinkage in drilling activity.

Trump, however, everyone’s favourite geologist, suggests that America ‘needs nothing from Canada’.

Good.

Canada is now selling its gas, LPG and CNG to Japan, Korea and China, and the volumes will increase markedly in 2025. Once trade agreements are finalized between Canada and the E.U., in addition to Japan, Korea and China, Canada will sell its 4.1 million barresl per day overseas and shut off oil to the U.S.

The U.S. consumes 20.2 million barrels of oil per day. It produces 13 million, and now, that number is about to drop by as much as 20% in the coming years, suggesting that in the U.S. there will be almost a ten million barrel per day shortfall, which will dratically increase the price of fuel at the pumps for the average American.

Meanwhile, Canada will be selling those additional millions of barrels of oil overseas, attracting a much better price than selling to Louisiana refineries at a heavily discounted rate.

Trump’s tariffs may well backfire in a massive way, for once Canada has inked agreements for all of its oil exports, there won’t be any sale of oil available to America.

When a gallon of gas goes up by more than a dollar a gallon, in short order, with more increases to come, America will have realized its arrogance doesn’t fill a gas tank.