Oil prices have declined sharply in recent weeks due to a combination of global economic pressures, increased production signals from Saudi Arabia, and broader shifts in energy market dynamics.
“Looking at the West Texas Intermediate spot price, we’ve seen a pretty precipitous decline,” said David Ripplinger, associate professor at North Dakota State University. He noted that current prices are nearing thresholds not seen since the post-COVID recovery in 2023.
Data from the Federal Reserve Bank of Dallas shows the breakeven point for operating an existing well is roughly $45 per barrel in regions like North Dakota. The cost to complete a new well is even higher—about $63 per barrel. Recent prices have dipped below both figures, raising questions about near-term drilling activity. North Dakota currently has about 30 active rigs, down slightly from earlier this month.
Meanwhile, a notable development in energy policy involves closer cooperation between the fossil fuel and biofuels sectors. Ripplinger pointed to a recent agreement on Renewable Fuel Standard (RFS) volumes, with stakeholders from both industries—including the American Petroleum Institute—supporting a mandate of 5.25 billion gallons for 2026, up from 3.35 billion in 2025.
The coalition’s alignment on renewable volume obligations is expected to bolster demand for biomass-based diesel and stabilize Renewable Identification Number (RIN) markets, particularly amid uncertainty surrounding federal clean fuel incentives like 45Z.
Source: Farm & Ranch Guide – Oil Prices Drop as Biofuels, Fossil Fuels Align