The U.S. oil industry received a strong signal this week about how damaging low oil prices can be for domestic drilling. One of the most experienced and influential oil producers in the country has stopped drilling in North Dakota for the first time in decades. This move highlights how even large and well-established operators struggle when oil prices fall too low to cover rising costs.
This development comes as oil prices hover near levels that many U.S. shale producers consider unprofitable. While low fuel prices may seem positive for consumers, they can quietly weaken oil-producing regions, reduce investment, and slow production across major shale basins.
A historic pause in North Dakota drilling
For more than 30 years, drilling rigs linked to Harold Hamm have operated continuously in North Dakota. That long streak has now ended. Drilling activity in the Bakken shale has been halted, marking a rare and symbolic moment for the U.S. shale industry.
The decision reflects a simple business reality. When the money spent to drill and operate wells nearly matches or exceeds the money earned from selling oil, drilling no longer makes sense. Margins have shrunk so much that continuing operations would bring little or no return.
North Dakota’s Bakken shale has played a major role in America’s energy story. It helped turn the United States into one of the world’s largest oil producers. Hydraulic fracturing and horizontal drilling unlocked oil trapped deep underground, changing how energy companies operate and how global markets view U.S. supply.
However, drilling is not cheap. Companies must pay for labor, steel, sand, water, fuel, transport, and land access. Over time, these costs have increased. At the same time, oil prices have struggled to stay high enough for producers to earn stable profits.
In recent months, U.S. oil prices have rarely stayed above $60 per barrel for long periods. For many shale producers, this level sits just at or below the point where drilling becomes worthwhile. When prices fall closer to $50 per barrel, profits can disappear completely.
Why $50 oil creates serious pressure on shale producers
The push for cheaper oil prices has become a major political and economic theme. A price of around $50 per barrel may help keep fuel costs low, but it creates serious pressure for U.S. drillers.
In shale regions like the Bakken, the average cost to drill a new well now sits close to $58 per barrel. This figure has risen by about 4 percent compared to last year. Higher service costs, equipment prices, and operational expenses have all contributed to this increase.
When oil sells below the breakeven level, companies face tough choices. They can slow drilling, pause operations, or stop entirely. That is exactly what is happening now in North Dakota.
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This pressure is not limited to one region. Analysts say that lower oil prices would reduce drilling activity across all major U.S. shale basins. Even the Permian Basin, known for being one of the most resilient and productive oil regions, would feel the impact.
As prices fall, companies reassess their budgets. They delay new wells, reduce rig counts, and focus only on their most productive assets. Less profitable wells are often shelved first.
This environment explains why drilling decisions are changing across the Lower 48 states. According to industry surveys, many wells that once made financial sense are now considered uneconomic. Falling prices directly affect whether companies can justify investing millions of dollars into new drilling projects.
Shale industry resilience meets rising costs
The U.S. shale industry has proven its resilience over the past decade. It survived two major market crashes and rebounded each time. New technology, better efficiency, and smarter planning pushed oil output to record levels.
U.S. crude production recently crossed 13 million barrels per day, reshaping global energy markets and cutting reliance on foreign oil. However, higher production has not guaranteed higher profits. At the same time, breakeven prices have become a growing concern. As drilling and service costs rise, oil prices must climb higher to justify new wells.
In the Bakken, margins have tightened sharply. Industry data now shows that Lower 48 oil production could stall in 2026, marking the first slowdown since the pandemic, not because oil is scarce, but because prices no longer support aggressive drilling.
Meanwhile, energy executives say falling oil prices are turning many wells uneconomic. As a result, companies are reassessing projects, cutting back activity, and prioritizing only their strongest assets.
The halt in Bakken drilling sends a clear signal. Even long-established operators cannot drill at a loss. Despite technological gains and strong output, basic economics continue to shape decisions across the shale industry.
