U.S. Shale Giants Hold Back on Drilling Despite Higher Oil Prices
ConocoPhillips Doubles Profit to $4 Billion, Raises Dividend What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… 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, theWTI Crudeprice 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 theQ3 earnings callearlier this week.
“It's not a good way to run an E&P just to be a perma bull.” Diamondback boosted third-quarter earnings,raisedits 2026 dividend, and revised up slightly its production outlook for this year, as it generated $2.1 billion in free cash flow for Q3.
“Base dividend growth remains a core tenet of the value proposition at Diamondback and our base dividend is now up over 9x since initiating at $0.50 per share in 2018,” Van't Hofwrotein the quarterly letter to shareholders.
Diamondback has used excess cash to repurchase bonds and shares and reduce debt in recent months, while it remains cautious about splashing on boosting production.
“The macro backdrop is almost exactly as we described last quarter: highly volatile and impossible to predict.
The timing of the eventual global oil supply normalization is anyone’s guess, and we therefore expect the current volatility to continue,” Van't Hof told shareholders.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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