{{articledata.title}}

The chief executive officer of %DiamondbackEnergy (NASDAQ: $FANG ) says that U.S. onshore %Oil production has likely peaked and will begin to decline alongside crude oil prices.

Diamondback CEO Travis Stice made the comments in a letter to shareholders, saying that America’s position as the world’s largest fossil fuel producer and its energy security are in jeopardy due to falling prices.

U.S. crude oil prices have declined 17% this year amid fears of an economic recession and are currently at $59.52 U.S. per barrel.

At the same time, OPEC+ producers led by Saudi Arabia are rapidly increasing supply, potentially swamping the global market and lowering prices further.

“We believe we are at a tipping point for U.S. oil production at current commodity prices,” wrote Stice. “It is likely that U.S. onshore oil production has peaked and will begin to decline this quarter.”

Diamondback is an independent oil and gas producer focused on the Permian Basin in the southern U.S., the most prolific oil patch in America.

The company is the third-biggest oil producer in the Permian Basin and the sixth biggest in the continental U.S.

Shale oil production over the last 15 years has transformed the U.S. into the largest fossil fuel producer in the world, with the country pumping more oil and gas than Saudi Arabia.

However, Stice says U.S. energy security is now at risk. “Today’s prices, volatility and macroeconomic uncertainty have put this progress in jeopardy,” wrote the CEO.

As crude oil prices continue to sink, it is likely to lead oil producers such as Diamondback Energy to scale back production within the U.S.

“We have a very good view of what the U.S. looks like, and right now, that’s a business that’s slowing dramatically and likely declining in terms of production,” reads the shareholder letter.

The number of crews fracking shale for oil and gas has fallen 15% this year with crews in the Permian Basin down 20% from a peak in January, notes Diamondback Energy.

Rigs focused on oil production are expected to decline nearly 10% by the end of the current second quarter and fall further in the third.

Diamondback itself has cut its capital budget by about $400 million U.S. this year, noting that import tariffs have increased oil well costs by about 1% or $40 million U.S. annually.

The stock of Diamondback Energy has declined 21% this year to trade at $131.98 U.S. per share.