Former President Donald Trump has called on OPEC to lower oil prices, citing it as a strategy to pressure Russia to end the war in Ukraine. However, this request could have unintended consequences for the booming US energy sector.

During his virtual appearance at the World Economic Forum in Davos, Trump questioned why OPEC+ hasn't done more to reduce global crude prices. He stated, "You've got to bring down the oil price, you've got to end that war. They should have done it long ago."

While Trump's request aims to deliver lower prices at the pump for US drivers, it potentially overlooks the interests of US oil producers. The US energy industry has become increasingly sensitive to pricing volatility, with lower prices potentially eroding profitability and reducing incentives to boost productivity.

Capital Economics noted that with breakeven oil prices for new wells in key US oil-producing regions estimated between $60-70 per barrel, a significant drop from current levels (around $75 per barrel for WTI oil) could make some higher-cost new wells uneconomical to develop.

The situation highlights the delicate balance between consumer interests and the health of the domestic energy industry. Trump's call for lower oil prices contrasts with his previous platform of expanding US oil production, which he viewed as unfairly constrained by regulation.

It remains uncertain whether OPEC will heed Trump's request. The cartel has been collectively narrowing production to boost prices for over a year, as its members face rising budget deficits due to falling oil prices.

Even without OPEC's intervention, analysts predict a major supply glut to weigh on prices through 2025. The US Energy Information Administration projects Brent crude to hit $74 per barrel this year before declining to $66 a barrel in 2026.

This development underscores the complex interplay between geopolitics, global oil markets, and domestic energy production, presenting challenges for policymakers and industry leaders alike.