US Shale Oil Not Taking Iran Bait

US shale producers are resisting higher oil prices due to extreme volatility from the Iran war and strict capital discipline. While crude supply growth is muted, upcoming natural gas pipeline projects in the Permian and rising Haynesville activity threaten 2027 gas price stability.

Key Takeaways

• 1.US shale oil production growth is stalling despite higher crude prices as public E&Ps maintain capital discipline and struggle with market volatility induced by the Iran war.
• 2.Permian Basin natural gas production growth has slowed to 0.6 Bcf/d due to pipeline constraints, but new egress projects like Blackcomb and GCX are expected to alleviate the stranded gas 'wave' by late 2026.
• 3.Haynesville rig activity has returned to 2023 levels, posing a risk of lower natural gas prices in 2027 if production growth accelerates into a well-supplied market.

Table of Contents

• US shale oil not taking Iran bait
• Geopolitical and market volatility limit US oil growth...
• public E&Ps are reluctant to increase shale oil activity
• 2H26 pipes provide outlet for stranded Permian gas and...
• more Haynesville rigs risk weaker 2027 gas prices
• Exhibit 1: BofA Global Research Commodity Themes and Outlook
• Exhibit 2: BofA Global Research Commodity Price Forecasts
• Overall Permian activity declines as operators retreat to the core...
• Permian infrastructure is limiting natural gas production growth...
• Permian leads rig gains while Anadarko builds and Bakken lags
• Mild winter allows Canada rig activity to pick up faster than normal
• Appalachia nat gas production is at record highs despite declining rig activity...
• Haynesville cycle times continue to improve pushing wells costs lower
• Haynesville rig count ramps with first gas targeting winter 26/27
• Permian and Haynesville production risk lower summer 2027 natural gas prices

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