Record Permian well permits point to growing U.S. oil supply

(Bloomberg) — Drilling permits for new wells have spiked to unprecedented levels in the Permian Basin, signaling crude oil suppliers in America are finally responding to higher prices, according to Rystad Energy. 

A total of 904 horizontal drilling permits were awarded last month in the shale patch that lies beneath Texas and New Mexico, an all-time-high, Rystad said. The four-week average of 210 approved permits for the week ending April 3 was also a record. 

“This is a clear signal that operators in the basin are kicking into high gear on their development plans, positioning for a significant ramp-up of activity level,” Artem Abramov, Rystad Energy’s head of shale research, said in a note to clients. The move “foreshadows a significant increase in supply capacity from early 2023,” he added.

The world is counting on the U.S. to increase crude production after Russia’s invasion of Ukraine disrupted supplies and sent oil prices rallying. Texas wildcatters have been saying that higher costs on labor and equipment and investors’ pressure to keep spending under control limits their ability to expand production.