Drill, baby, drill

It’s different this time.

The U.S. has been the powerhouse of global oil production, playing a pivotal role in meeting the worlds relentless demand for energy. Over the past 20 years, U.S. oil production has skyrocketed, increasing by more than 8 million barrels per day. At the heart of this growth lies the Permian Basin region so prolific that it has become synonymous with American energy dominance. The Permian has been the crown jewel, delivering unmatched production growth and serving as the backbone of the U.S. shale revolution. It was why, before export restrictions eased in 2021, analysts often said if you cared about oil, the Permian was the only asset that mattered.

But the shale boom is entering a new chapter. Much of the Permian’s tier-one drilling inventory-prime, high-quality acreage-has already been tapped or is controlled by giants like ExxonMobil and Chevron, who are more focused on capital discipline and shareholder returns than aggressive expansion. The future of the Permian is shifting to tier-two inventory, characterized by more challenging geology: gas-heavy, sour gas, and less prolific wells. This evolution will make it harder for the Permian to offset declines in older plays like the Eagle Ford and Bakken.

As the U.S. approaches the limits of its domestic shale boom, the focus must broaden. International oil development is key, and U.S. majors need to pivot toward regions previously deemed uninvestable due to political or regulatory challenges. Countries like Iran, Venezuela, Argentina, and Mexico hold vast untapped reserves, but unlocking their potential will require significant progress on rule-of-law issues and regulatory stability. These regions represent the future of global oil production, as the U.S. role gradually shifts.

Domestically, the U.S. needs to double down on its natural gas potential. Liquefied natural gas (LNG) exports, expanded gas pipeline infrastructure, and tighter energy integration with Canada should become priorities. The elimination of Canada’s carbon tax, paired with a unified North American energy strategy, would enhance competitiveness and create a more resilient energy market.

In short, while the rallying cry of Drill, baby, drill remains relevant, the focus is shifting. Globally, new frontiers await development, while at home, the energy transition demands strategic investment in gas infrastructure and collaboration with trusted partners.