Why the Permian Basin won’t replace lost Middle East oil, with Jai Singh and Matthew Bernstein

Let’s Talk Energy and kick off our first episode back from our summer break with a look at the Permian Basin. The production trajectory in the Permian has been one of the single most important variables to understanding global oil supply – if not the entire oil industry – for much of the past decade. Permian production more than tripled since the start of the US tight oil revolution around 2014 and now sits above 6.6 million barrels of oil per day -almost half of US oil output – and well over 25 billion cubic feet per day of natural gas.In the process, hundreds of companies sprang up, rapidly drilled, merged, drilled a bit slower and merged again as they sought to win over investors whose demands shifted from rapid growth to cash returns.But the days of jaw-dropping production gains are over, and companies aren’t inclined to ramp up activity to fill the hole in global supply left by the blockade of the Strait of Hormuz.In this episode, we’ll look at:How much affordable oil is left in the Permian and how long might operators be able to keep up current rates of production?Which companies control the highest number of choice locations, and do they have enough to earn the confidence of investors keen to know if their cash returns are sustainable?And what are the implications of the rising volumes of natural gas that are trading at much higher prices than they did in the past?Related Analysis:Permian Deep Dive Report (clients only)The price of passage: How Hormuz recovery determines Brent’s future (clients only)ExxonMobil’s Permian efficiency gains pay off with bumper quarter (clients only)Sustained oil price signal needed to trigger shale supply response (clients only)E&Ps pay premium for contiguous Delaware NM acreage in lease sale (clients only)US shale braces for next consolidation wave as smaller players seek scale (available to non-clients)Related Episodes:How data center growth is slowing the US shale comebackHow the worst oil crisis ever recorded could end in energy abundanceCheap no more: How rising demand is reshaping US natural gasThe next US shale hotspot: Western Haynesville, with Matthew BernsteinLet’s Talk Energy is a Rystad Energy Production.  Produced by Elliot Busby & Både Og.  Executive producers: Noah Brenner, Elliot Busby, Evodie Fleury-Greaker & Erik Means.  Follow us on: LinkedIn  YouTube  Instagram  X