Quote:The biggest U.S. shale producers have remained conservative in spending on drilling this year despite the spike in the average WTI crude price by $20 per barrel compared to last year.

While signs have emerged that smaller independents have started to take advantage of the higher oil prices to increase drilling, the biggest shale producers are keeping their powder dry amid unprecedented uncertainty in global markets.

One of the top shale producers and the biggest Permian-only focused driller, Diamondback Energy, signaled this week that it will not be splashing on materially increased drilling activity next year as uncertainty remains too high.

So far this year, the WTI Crude price has averaged $86.72, more than $20 per barrel compared to the 2025 average of $64.94.

The price spike alone is not a reason for loosening capital spending discipline, according to the biggest shale producers, including Diamondback.

“I wouldn't say I'm unnecessarily cautious personally, but I think it's always good to prepare the company for a swing to the downside,” Diamondback’s chief executive Kaes Van't Hof told analysts on the Q3 earnings call earlier this week.

“It's not a good way to run an E&P just to be a perma bull.”

Quote:The macro picture is so muddied right now that not only Diamondback, but all other U.S. shale producers are unlikely to jump the gun on a significant drilling spree next year just because oil prices are high now.

So far this year, U.S. oil production has increased slightly, but not at any scale to offset the massive disruption of supply from the Middle East. The Hormuz crisis has hiked crude oil futures prices and created a shipping crisis with record-high freight rates that raised the actual physical cost of bringing crude oil to refineries.

Supermajor ExxonMobil, with its huge Permian position, is not focused on volumes too much, either, despite hitting its production target earlier this year.

Quote:In the shale patch, smaller and privately-held operators would be more inclined to drill more amid the oil price surge this year, according to Nathan Nemeth, Wood Mackenzie’s director of Lower 48 Upstream research.

Production is rising with a lag to the price spike from eight months ago, but most large-scale operators dominating the shale basins are reluctant to commit to major increases in output amid a volatile and highly uncertain environment, according to WoodMac.

Quote:”It is very challenging to select a planning price or budgeting price,” one E&P executive said in comments to the latest Dallas Fed Energy Survey in September, while another one simply noted, “It sure would be nice to have a less volatile market.”