Major US Shale Producer To Boost Output, And It Suggests One Thing
Last month, roughly three weeks into the U.S.-Iran conflict, UBS chief economist Arend Kapteyn told clients that one reason this Middle East energy shock is "not like the 2011-2014 shale boom" is the lack of a comparable response from the U.S. shale patch. In other words, the oil shock was viewed as temporary by major shale players and not worth adding new drilling rigs to the mix.
But now, on day 35 of Operation Epic Fury, that assumption about a less responsive U.S. shale patch in the face of soaring energy prices looks increasingly stale. President Trump's remarks earlier this week were viewed by some analysts as less of a de-escalation. Trump said, "We are going to hit them extremely hard. Over the next two to three weeks, we're going to bring them back to the Stone Age."
Since Kapteyn's mid-March note, Wall Street has also started to reprice the duration of the energy shock. Goldman last week raised its 2026 Brent forecast to $80 a barrel, while Reuters polling shows much of the Street expects crude to be over $82 this year, up from the low $60s earlier this year, reflecting that the Hormuz chokepoint won't fade quickly.
Context here matters because the energy mess in the Gulf is no longer being treated as a "temporary" shock, and shale can no longer afford to ignore it. The longer Hormuz remains disrupted and the more Trump signals a prolonged military campaign, the greater the odds of a response from America's shale complex.
The first sign that U.S. shale players are beginning to respond to higher prices, and the admission that elevated WTI prices are here to stay, comes from billionaire oil wildcatter Harold Hamm's Continental Resources, which plans to increase production shortly.
"Continental is increasing our capital budget, which will increase production," CEO Doug Lawler told Bloomberg in a statement.
Lawler did not explain how much production will increase or how many new rigs will be brought online. Continental operates in North Dakota, Oklahoma, Wyoming, Texas, and has recently expanded into Argentina's Vaca Muerta.
As of 4Q25, Continental produced 475,000 barrels of oil equivalent per day, with 43% from the Bakken and 23% from the Permian.
Before the conflict, Continental planned to spend about $2.5 billion in 2026, down 20% from 2025, as fears of a global glut emerged and WTI in the low $60s heavily weighed on shale economics.
"If you think that's because they want to help lower energy prices, think again. Any oil company that commits to boosting future investment thinks oil prices will stay high and wants to cash in," former Yahoo Finance reporter Rick Newman wrote on X, responding to the Bloomberg story.
If you think that's because they want to help lower energy prices, think again
— Rick Newman (@rickjnewman) April 2, 2026
Any oil company that commits boost future investment thinks oil prices will stay high and wants to cash in
The question now is whether Continental's move will spur other shale players to bring on rigs and increase production...
... and, if so, that may add industrial tailwinds for the U.S. economy while also weighing on consumers through elevated fuel prices at the pump (at first) before production increases and weighs down prices.