Bloomberg: ‘Weight of world’ falling on shoulders of Permian oil production
The Permian is “busier than any other country” with nearly 20 percent of the world’s supply of working drilling rigs in the basin.
“All eyes are on the Permian” after disruption in Russian oil exports further exposed a looming global supply crisis, according to a recent Bloomberg report.
Following Russia’s invasion of Ukraine, just the threat of disruption to Russian oil exports “sent prices racing past $130 a barrel in a dizzying surge,” the news publication noted in its article headlined, Why the Global Oil Market Hinges on Five U.S. counties. With expanding economies creating an ever-growing need for energy, Bloomberg argues that the Permian is uniquely positioned to help meet critical demand.
Since 2015, growth in the Permian has outstripped the rival basins in North Dakota, South Texas and Oklahoma, where production has depressed, Bloomberg notes. Unlike OPEC countries like Kuwait and Iraq, “drillers in the Permian aren’t beholden to alliances that restrict production,” nor do they face the financial obstacles impacting Venezuela. Saudi Arabia is among the few oil producers in the world that can compete, according to Bloomberg.
The Permian has been busy in answering the call for energy. Bloomberg cites data showing the Permian is “busier than any other country” with nearly 20 percent of the world’s supply of working drilling rigs in the basin. The Permian currently accounts for nearly half of the total U.S. supply.
Local producers are heeding the nation’s call to increase production in support of the U.S. economy and its strategic position in the world. As an example, Chevron is boosting production by 10 percent this year, with the aim of reaching one million barrels of oil equivalent per day by 2025, while simultaneously embarking on ambitious plans to reduce the carbon intensity at its facilities.
The Permian’s advantages are its “massive, untapped reserves” buried in the layers of shale rock exceeding that of Middle Eastern fields, the relative low-cost to access them, and good infrastructure such as pipes for transport.
Potential obstacles to the Permian’s production future are limited natural gas pipeline capacity, and also government support, according to Bloomberg.
But for now, the Permian is “bursting with activity,” and “the weight of the oil world is falling squarely on the shoulders of a few counties tucked into lonely corners of the U.S. Southwest,” the news publication said.