The continuously desperate state the global oil industry finds itself in has reached the US shale industry – once hailed as the saviour of America’s energy independence – with debts of around $30bn being reported. As a consequence, many of the industry’s smaller producers that sprung up over the last few years amid the shale boom are set to declare bankruptcy.

Borrowing among the industry has hit $169bn

According to a report in the FT, the industry lost as much as $32bn in the first half of this year, thanks in large part to the bankruptcies and restructurings that low prices have caused. Oil production has also fallen over the last few months in the US, with producers reining in their operations in light of consistently low prices.

Borrowing among the industry has hit $169bn, according to analysts Factset. This is more than double the figure from 2010. Raising all these debt helped US shale firms to propel the industry over the last seven years towards a level where it posed a serious threat to the OPEC nations dominance of global oil.

However, with low prices and OPEC’s insistence on maintaining high production levels, the US shale industry has come under intense pressure. As a result, companies are struggling to get the financing they need to continue their operations. According to Dealogic, US producers sold bonds of $10.8 in the first quarter of 2015, but only sold $1bn during the first two months of this quarter.

This fall in the ability to raise money has led to a decline in production over the last few months, as producers worry about the length of low oil prices. Oil services company Baker Hughes Inc announced last week that rig counts throughout the industry in the US had fallen by 13 to 662 last week, which represented the biggest decline in three months.

Responding to the news, Caprock Risk Management analyst Chris Jarvis told Reuters that this decline may not be the bottom of the market. “Clearly the precipitous drop in oil prices has hit capital expenditures for new drilling in the US with today’s Baker Hughes rig count numbers. With prices remaining at relatively low levels without much relief in sight, we are likely going to see further declines.”