US shale output climbs as oil prices top $100 on war disruption

US shale companies are cautiously increasing output as prolonged disruptions from the Iran war have pushed global oil benchmarks above $100 a barrel, creating the most profitable environment for producers in years but leaving consumer prices elevated. The surge in overseas demand has driven US crude exports to a record 6.4 million barrels per day in one week, fundamentally reshaping global energy flows.

"Oil markets are operating efficiently, even in a time of crisis,” said Clayton Seigle, a senior fellow for energy security at the Center for Strategic and International Studies. Market participants are finding ways to connect supply with demand after the conflict removed 13 million barrels per day of Middle Eastern supply from the market for over two months, he added.

The impact is visible across the energy sector, with Brent crude, the international benchmark, trading above $100 a barrel as of May 6, while West Texas Intermediate fetched about $95. This price surge directly fueled record first-quarter profits for energy giants like Shell, which reported $6.92 billion in earnings. Canadian producer Tourmaline Oil Corp. saw its Q1 2026 cash flow reach $862.2 million, with the company noting that strong global liquids prices would increase its 2026 NGL realizations by approximately 30 percent over 2025.

The United States, the world’s largest oil producer, is moving to fill the void. Weekly exports averaged 5.3 million barrels per day in April, a sharp increase from 3.8 million at the end of March, according to the U.S. Energy Information Administration. This has come at the cost of domestic reserves, with the Department of Energy releasing nearly 23 million barrels from the Strategic Petroleum Reserve since late March, bringing the total down to about 392 million barrels as of May 1.

Producers Respond to Price Signals

The sustained high prices are serving as a catalyst for new investment in drilling and fracking operations. Diamondback Energy, a major shale producer, announced on May 4 that it would step up both drilling and completions. This follows similar moves by other companies, including Shell's recent $16.4 billion acquisition of Canadian shale producer ARC Resources.

“The longer it drags on, the more incentive U.S. producers have to increase their output,” Rob Wilson, president of East Daley Analytics, told USA TODAY.

Canadian producers are also capitalizing on the price environment. Tourmaline Oil Corp. reported drilling 70 new wells in the first quarter of 2026 and expects its exposure to international LNG prices (JKM and TTF) to significantly boost free cash flow. The company's average realized natural gas price in Q1 was CAD $3.59/mcf, well above the Canadian benchmark.

Consumers Face Sustained Pressure

Despite the increase in US production and exports, domestic gasoline prices remain high, with the national average at $4.54 per gallon, according to AAA data. Experts say this is because oil prices are set on the global market, and a supply disruption anywhere affects prices everywhere.

“We are, unfortunately, probably on our way to revisiting that all-time high of the nationwide pump price, just above $5 a gallon, that we saw in 2022,” Seigle said.

Even if the exported oil were kept in the United States, domestic refineries are already running near maximum capacity, limiting the ability to produce more gasoline. The path for consumer prices will ultimately depend on how long the supply disruptions in the Middle East last.

This article is for informational purposes only and does not constitute investment advice.