From Yahoo Finance: 2025-05-09 16:00:00

The OPEC+ group will increase production by 411,000 b/d in May, surprising markets. Trump tightens sanctions on Iranian oil, affecting 1.8 to 2.0 million b/d mostly bought by China. OPEC+ plans to increase production by another 411,000 b/d in June, causing concern over lower oil prices’ impact on supplies and company performance.

The oil industry consists of government-dominated international companies and US private enterprises. IMF estimates “break-even” oil prices for countries range from $50/barrel for UAE to $125 for Kazakhstan, Algeria, and Iran. RBC Capital estimates large integrated oil companies’ “break-even” prices, including $56 for Chevron and $57 for Exxon.

US oil and gas industry is composed of private enterprises, with costs ranging from $26 to $45/barrel in different field areas. The price needed to drill new wells averages $50 to $65/barrel. Operator’s field sale price is influenced by oil nature, location, and buyer’s price. Operators require $78 to $85/barrel to initiate growth drilling programs.

Federal Reserve surveys show uncertainty among oil operators. Oil prices are expected to remain stable, contributing to lower inflation. World conflicts may disrupt supplies, and Europe faces challenges in deciding its future. Trump administration’s economic disruptions may settle by fall. Modest drilling rates are expected to maintain production levels.



Read more at Yahoo Finance: A note on the news: “Break-even” oil prices