International Upstream Sector Sees Shifts as Emerging Basins Surge Ahead

The international upstream sector has seen significant shifts in the past year due to trapped supply in the Gulf and spiking oil prices. Emerging basins in Guyana and Namibia continue to surge ahead with further exploration and development, while more traditional regions are more measured in their enthusiasm.

According to World Oil's forecast for 2026, there will be a downward trend in US drilling due to lower energy prices and operator fiscal discipline. However, escalating conflict in the Hormuz Strait has intermittently tied up 20% of global supply, mostly from Middle Eastern producers, prompting other regions like South America, Canada, North America, and Africa to increase production.

Countries like Canada (4.9 MMbpd, up 3.9%) and China (4.3 MMbpd, up 1.7%) have maintained record output levels, while Brazil and Guyana also registered significant gains. The Strait of Hormuz closure has constrained supply, and oil prices have surged above $100/bbl, prompting several regions to open the floodgates on production.

Africa and the South Pacific region are expected to lead growth in international drilling this year, with 24,628 wells anticipated. Canada's drilling is expected to increase by 3.4%, while Mexico will see a 61.5% jump in drilling activity.