U.S. oil is back, and ExxonMobil’s $60 billion deal isn’t even the biggest signal

Domestic oil production hit an all-time high last week, marking a full recovery from the Covid pandemic after drilling had dropped more than 25% between pre-Covid peaks and a bottom in early 2021.

The comeback is being driven by the Permian Basin in Texas, where ExxonMobil is now consolidating its position with a $60 billion acquisition of Pioneer Natural Resources, and which has low production costs per barrel and easy pipeline access that pays off faster than offshore drilling.

For years, Wall Street has pushed oil and gas companies to cut capital spending and boost buybacks and dividends, but production has risen about 3 million barrels/day from the bottom, and could rise by nearly 1 million more by 2025.

After three and a half years, a tripling in the S&P 500 Energy Index, and many soon-to-be-forgotten culture-war volleys, the U.S. Department of Energy announced Oct. 12 that U.S. crude oil production had hit an all-time high of 13.2 million barrels per day, entirely wiping out Covid-era losses of more than 3 million barrels per day.

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