Market Data 
President Trump’s sweeping new tariffs may have rattled markets, but they reaffirm one constant in America’s economic strategy: energy dominance.
For nearly two decades, the United States has leveraged its resource base, private capital, and relentless innovation to become the world’s top producer of oil and natural gas. Today, U.S. energy production is not only a pillar of domestic strength but a critical lever of international influence.
The data tells the story. U.S. oil production—including crude, condensates, and natural gas liquids—now accounts for 20% of global supply. Natural gas production has doubled since 2005 and makes up a quarter of the world’s output. Add it all up, and the U.S. now produces more hydrocarbons than Saudi Arabia and Russia combined.
We are the world’s largest exporter of liquefied natural gas (LNG) and the third-largest exporter of crude and condensates. This growth has not just benefited our economy—it has reshaped the global energy map.
The geopolitical dividends have been enormous. When Russia slashed gas flows to Europe in 2022, it was American LNG that kept the lights on and factories running across the continent. Record-breaking oil production gave the U.S. the flexibility to enforce tough sanctions on adversaries like Iran and Venezuela without triggering global price spikes. And deepening energy ties with Asia are strengthening U.S. influence in one of the world’s most important regions.
This transformation is the result of hard-earned advantages. Cost reductions across U.S. shale basins have been staggering—real breakeven prices have dropped by 65% since 2005. Our ability to ramp up or slow down production in response to market shifts gives U.S. producers unmatched flexibility. Add in a transparent, investor-friendly fiscal system and an open M&A environment that drives continuous improvement, and it’s clear why the U.S. has become the most competitive upstream oil and gas market in the world.
But dominance is not destiny. The same strengths that built U.S. energy leadership are now under pressure. The largest shale plays are maturing, and resource productivity has plateaued in several key regions. Much of the remaining top-tier inventory is already drilled. Capital discipline, once a virtue, now constrains reinvestment just as operators need to explore new basins. Fixed dividends and investor expectations have limited growth. And mounting regulatory hurdles are stalling the buildout of critical infrastructure, creating localized price discounts that eat into profitability.
Meanwhile, China is building a different kind of energy empire. While the U.S. leads in oil and gas, China is winning the race to dominate clean energy supply chains. It already accounts for the lion’s share of global production of EVs, batteries, and solar modules—and is using that leverage to transform its domestic energy system and create export markets abroad. And while China still burns a lot of coal, its long-term energy posture is built around decarbonization, electrification, and strategic industrial policy.
If the U.S. wants to maintain energy leadership through the 2030s and beyond, it needs to act with the same urgency and focus that sparked the shale revolution. New digital technologies, including AI-driven diagnostics, hold real promise. If major producers can drive breakeven prices down another $5 per barrel, it could unlock new inventory, extend the life of legacy basins, and make U.S. tight oil globally competitive for another generation.
Exploration must also be revived. Plays like the Uinta, deeper Permian benches, and Utica could help replenish well inventory—but only if they receive capital and midstream support.
Improved infrastructure is key. The early shale boom succeeded in part because long-haul pipelines kept pace with production. That’s no longer the case in several high-potential basins, where takeaway capacity constraints now suppress investment. Recent permitting reform efforts are a good start, but they must be matched with permitting approvals and project execution.
Policymakers also have tools to help keep capital flowing—enhanced depreciation allowances and broader deductions for intangible drilling costs could spur reinvestment without upending the broader fiscal framework that has served the industry well.
This isn’t just an industry challenge. It’s a strategic imperative. Energy dominance gives the U.S. leverage over adversaries, stability at home, and influence abroad. But that advantage isn’t permanent.
If U.S. oil and gas production plateaus and begins to decline—as Wood Mackenzie forecasts may occur in the early 2030s—it will ripple across markets. U.S. influence abroad will diminish. Capital for new exploration will dry up. Buyers of U.S. energy may reevaluate their long-term supply strategies. And a U.S. industry configured for growth could struggle to compete in a world of declining output and rising competition from alternative energy sources.
To preserve its energy advantage, the U.S. must remain a global leader in both hydrocarbons and the next generation of clean energy technologies. Carbon capture, hydrogen, and advanced nuclear must be seen not as threats to the oil and gas sector, but as strategic hedges that preserve relevance in a decarbonizing world. Dominance is not about picking one path—it’s about keeping every option on the table and executing better than anyone else.
America became an energy superpower by embracing risk, rewarding innovation, and adapting faster than anyone else. That mindset must continue. The shale boom won’t last forever—but our ability to lead the next energy era will depend on what we do now.
