Shale Makers Choose Profits Over Production Amid Global Oil Shortage

US shale majors are cutting their spending plans despite higher international oil prices. According to Bloomberg, companies such as Chevron and ConocoPhillips spent 10% less in the first six months of the year compared to the same period last year.

Others, including APA Corp., HighPeak Energy, and Matador, also reduced their spending by varying amounts. This move is part of a broader trend where companies prioritize shareholder returns and debt repayment over production growth.

The global oil market is expected to slip into a deficit of 1.8 million barrels daily, the International Energy Agency reported. However, US crude oil production has been breaking records, reaching 13.714 million barrels daily in May.

Despite higher oil prices and a physical supply squeeze, shale majors are not increasing their drilling activity. The industry's focus on discipline and shareholder returns is seen as a structural change that may impact production growth.