U.S. Oil Producers Increase Spending as Iran War Disrupts Supply

U.S. oil companies are increasing spending and production targets following supply disruptions from the war in Iran. Kaes Van’t Hof, CEO of Diamondback Energy, said operators are becoming more comfortable that additional barrels are needed. The company is raising its capital expenditure budget and increasing its annual production target by about 3%.

Johnson, CEO of Primary Vision, said the number of active frac spreads has risen 20% in the Permian basin over the past two weeks. The nationwide count reached 184 this week, up from 166 at the start of April. S. production exceeding 14 million barrels per day this year.

Abhishek Agrawal, senior research analyst at Wood Mackenzie, described the additions as measured rather than a full drilling boom.

U.S. benchmark price is nearly 30% above pre-war levels. Van’t Hof said companies must balance the risk of missing profits against the danger of overextending when prices later decline. Larger firms including Exxon and Chevron are keeping pre-war production targets. Smaller producers are accelerating activity to capture higher prices and secure equipment and workers.