Oil prices are set to trend higher in the coming years, according to Standard Chartered, as the economics of U.S. shale have shifted significantly, according to OilPrice.com.

While crude has hovered near $70/bbl — close to the 20-year average of $73.38 — StanChart notes that breakeven costs in the shale patch have climbed sharply. “The average breakeven price for Permian producers is now edging back toward the mid-$60s, up from the mid-$50s just two years ago,” the bank said, attributing the rise to higher costs for steel, labor, and frac materials, in part due to U.S. tariffs.

Analysts at Rystad Energy and Wood Mackenzie share the view that today’s oil prices are unsustainably low for shale. Rystad estimates breakeven prices for new horizontal wells in key plays near $68/bbl, while WoodMac warns that without a firmer price floor, “the rig count will absolutely fall.” Both firms point to tight capital budgets, cautious reinvestment, and a continued investor focus on returns rather than growth.

OilPrice.com reports that the outlook comes as crude prices hit six-week highs. Brent crude for September rose 1.2% to $73.34/bbl, while WTI gained 1.5% to $70.24, driven by geopolitics and trade developments. President Trump extended his deadline for Russia to reach a ceasefire with Ukraine to Aug. 3 from July 14, warning of additional sanctions and tariffs if talks fail. “The new deadline caught many analysts by surprise and, if enforced, could tighten Russian crude and fuel supplies to the global market,” BOK Financial Securities said.

Oil prices also found support from a U.S.-EU trade agreement that avoided escalation into a full trade war. Under the deal, EU exports to the U.S. will face tariffs capped at 15%, providing relief to markets worried about a broader slowdown in trade.

Still, gains were tempered by a surprise U.S. crude stock build. The Energy Information Administration reported commercial crude inventories rose 7.7 million barrels in the week ending July 25 to 426.7 million barrels. While stocks remain 6% below the five-year seasonal average, the weekly jump was far larger than the 1.54 million-barrel increase reported earlier by the American Petroleum Institute, catching traders off guard.

Meanwhile, U.S. drilling activity continues to contract. The Baker Hughes rig count shows oil rigs falling for the 13th consecutive week to a 46-month low of 415, down 68 rigs year-to-date. Texas saw the steepest declines, with drilling in the Eagle Ford formation down five rigs to 34, while Permian activity slipped in both the Delaware and Midland basins.

Bloomberg reports separately that fracking activity in the Permian Basin is slowing faster than expected as tariff uncertainty and rising OPEC+ production weigh on demand. ProPetro Holding CEO Sam Sledge said only about 70 frack crews remain active in the world’s top shale region, down from roughly 100 earlier this year.

“The completions market in the Permian Basin continues to face challenges,” Sledge told analysts, citing idle capacity driven by weaker market conditions. ProPetro shares fell as much as 21% after a surprise second-quarter loss, with the company now planning 10–11 crews this quarter and potential cuts ahead.

The forecast echoes Halliburton, which said last week it will sideline equipment amid worsening U.S. shale conditions.

With U.S. output under pressure and global geopolitical risks mounting, Standard Chartered’s bullish view reflects a tightening supply picture. Many analysts see sustained prices above current levels as essential to stabilize U.S. production — a dynamic that may be shaping the Trump administration’s increasingly hard stance on Russia.