US Shale Producers Hold Back Despite Oil Price Surge

HOUSTON – As fighting escalates between the US and Iran, oil prices have surged past $90 per barrel, yet US shale producers remain reluctant to ramp up production. According to Rystad Energy’s latest analysis, even in a “super-accelerated” drilled, uncompleted wells (DUC) drawdown scenario, the Permian Basin could add 183,000 barrels per day (bpd) and other regions 56,000 bpd. However, this would require nearly full utilization of available frac fleets, pushing the limits of feasibility.

Shale Producers

Matthew Bernstein, Rystad’s VP for North America Oil & Gas, explained that producers are exercising strategic caution and hedging revenues rather than rushing to expand. “Unless high prices last for months, shale E&Ps are unlikely to revise their plans, which budgeted for $55-60 WTI,” he said.

The hesitation stems from two factors: capital discipline and depleted DUC inventories. Low prices in 2025 forced companies to prioritize shareholder payouts and balance sheet stability, drawing down excess DUCs and cutting capex. As a result, even if producers wanted to grow quickly, their capacity is limited.

Production boost

Rystad outlines several scenarios. In a moderate case, adding 46 rigs over five months could boost production by 196,000 bpd from exit 2025 to exit 2026, 280,000 bpd higher than the pre-war base case. A maximum case, deemed highly unlikely, assumes aggressive activation of nearly all available rigs, yielding 464,000 bpd upside by December 2026 and 500,000 bpd by end-2027.

For now, most public producers prefer to hedge and rebuild cash reserves, while private operators may selectively add rigs or frac crews to capitalize on strong prices in the second half of 2026. Bernstein emphasized that discipline remains the guiding principle, with companies wary of draining productive capacity too quickly despite geopolitical volatility.

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