Crude oil supply in the United States will likely plateau and even slightly decline if the price of oil remains in the low $60s or drops further, one top oil executive warned. 

For months, oil and gas producers have cast doubt on whether the markets can support the Trump administration’s efforts to “drill, baby, drill” while crude prices continue to drop and supply chain costs remain high due to tariffs on products such as steel.

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As some have said, those factors will force drillers to take cost-cutting measures and slow operations. ConocoPhillips CEO Ryan Lance warned on Tuesday that market conditions will cause supply growth to stall or even slightly decline.

If “prices stay at $60 or go into the $50s, you probably are plateauing or slightly declining,” he warned during the Energy Intelligence Forum in London on Tuesday.

He noted that if the price of domestic oil, such as West Texas Intermediate, stays at around $60 to $65 per barrel, supply will probably plateau around the 13 to 13.5 million barrels per day mark.

He stopped short, though, of saying supply will dramatically fall.

“This isn’t a case where one to two years from now, we’re going to be at 13.5 [million barrels per day], then we’re going to be 13, then we’re going to be 12.5. That isn’t going to happen,” Lance said.

As technology continues to improve and drilling techniques become more efficient, he said, the industry will figure out how to make increased production profitable even at the $60 price line.

Oil and gas executives have warned that falling prices, combined with increasing supply chain costs due to the Trump administration’s tariffs on products such as steel, have made it more difficult for producers to pursue new drilling profitably.

Many have warned that the market conditions will force companies to take cost-cutting measures, including layoffs. 

“The uncertainty from the administration’s policies has put a damper on all investment in the oilpatch,” one exploration and production firm executive warned in the latest Federal Reserve Bank of Dallas survey released last month. “Those who can are running for the exits.” 

During the Tuesday forum, Lance also pushed back against fears of a global supply glut.

Worries have grown in recent months that continued production hikes from OPEC+ and increased drilling in the U.S., combined with falling demand headed into winter, would leave markets in a state of oversupply. 

“I will say that the sentiment today that’s in the market doesn’t really match the physical market,” Lance said, explaining there have not been any major supply hikes in floating inventories in the U.S. Gulf Coast, which typically happen during times of spare capacity.

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Oil prices dropped again on Tuesday, with domestic benchmark West Texas Intermediate remaining below $60 per barrel. 

As of around 10:30 a.m., WTI was down 1.82% and selling at $58.41 per barrel. International benchmark Brent Crude was also down 1.86% and priced at $62.14 per barrel.