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(Bloomberg) -- Diamondback Energy Inc., the largest independent oil producer in the Permian Basin, says production has likely peaked in America’s prolific shale fields and will decline in the months ahead as crude prices have plummeted.

The Midland, Texas-based company, which trimmed its own production forecast for the year, said in a letter Monday to investors that it expects US onshore oil rigs to drop by almost 10% by the end of the second quarter and fall further in the months after. 

“This will have a meaningful impact on our industry and our country,” Diamondback Chief Executive Officer Travis Stice wrote. “We believe we are at a tipping point for U.S. oil production.” 

The outlook from Diamondback, one of the industry’s most notable producers, is a surprise. Before oil prices started plunging last month, most banks and research firms had forecast US shale production would grow this year and next before plateauing later in the decade. The Permian, they said, was apt to peak in the late 2020s or early 2030s depending on prices.

Shale fields have been the engine behind America’s surge in crude output over the past 15 years, making it the world’s top producer. The ability of companies like Diamondback to quickly bring new wells online using hydraulic fracturing, or fracking, has bedeviled OPEC. The prospect that they may have reached their peak, meanwhile, poses a threat to US President Donald Trump’s goal to turbocharge fossil fuel production. 

Analysts and pundits have said repeatedly that US shale is poised to peak. Yet the industry has proved them wrong by innovating and driving output to fresh records year after year. So the assertion by Diamondback that the moment has finally come is noteworthy.

“Today, geologic headwinds outweigh the tailwinds provided by improvements in technology and operational efficiency,” said Stice, who will step down as CEO at the company’s annual shareholder meeting later this month. 

US oil futures have dropped about 20% since the start of April when Trump announced wide-ranging tariffs that triggered a global trade war. At the same time, OPEC and its allies have surprised markets with plans to increase oil supplies more than expected later this year. 

It’s led to frustration spilling out both privately and in public comments from America’s oil bosses. US Energy Secretary Chris Wright sought to reassure the industry during a visit to Oklahoma last month, saying turmoil from the president’s trade war is apt to be fleeting.

“We can’t help but wonder if the last ‘letter to stockholders’ written by outgoing CEO Travis Stice was intended as much for government leaders in Washington, DC as it was for FANG shareholders,” Tim Rezvan, an analyst at KeyBanc Capital Markets wrote in a note to clients, referencing the company’s ticker symbol.

Diamondback said the number of crews fracking wells, which it estimates has fallen 15% this year, will continue to shrink as shale operators dial back amid unprofitable oil prices. 

The company now expects to produce about 488,000 barrels of oil per day this year, when taken at the midpoint of its new guidance released Monday. That’s less than 1% lower than the roughly 492,000 barrels-per-day view it gave three months ago. 

The driller is the latest US operator to announce cutbacks in recent months. EOG Resources Inc. and Matador Resources Co. are also dialing back activity, while Nabors Industries Ltd. said that shale producers plan to cut 4% of their drilling rigs by the end of the year, citing a survey of nearly half the industry.

Diamondback is cutting three drilling rigs and one of its frack crews, leading to a total of $400 million slashed from its budget this year, Stice said.

“We are taking our foot off the accelerator as we approach a red light,” he said. “If the light turns green before we get to the stoplight, we will hit the gas again, but we are also prepared to brake if needed.”

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