This move is not surprising at all if you consider that the shale revolution in the US peaked and at some point the economics are going to start to decline. So it becomes critical to look for other sources or have to rely on other parts of the world for oil again.
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Key metrics and analyses as of early 2026 show:
- **Normalized productivity (e.g., oil per lateral foot)** — Declined by ~6-8% year-over-year in recent periods (2024-2025 data). Morgan Stanley reported an 8% drop in oil per foot drilled in the Delaware and Midland sub-basins for 2025 compared to 2024 averages. Analysts like Goehring & Rozencwajg and Novi Labs/Enverus have highlighted this since 2023-2024, attributing it to depletion of Tier 1 (core/sweet spot) acreage, now ~60% developed, forcing shifts to lower-quality Tier 2/3 zones with higher water cuts and costs.
- **Initial production (IP) growth per well** — Slowed markedly. Goldman Sachs forecasted IP rises of +100 b/d in 2024, dropping to only +50 b/d in 2025-2026—about one-third of 2019 levels. This reflects maturing geology despite technological gains.
- **Estimated ultimate recovery (EUR) per well** — Fallen in major plays. Art Berman and others note 20-30% lower EURs for recent Permian wells compared to a few years ago, due to faster decline rates and parent-child well interference (cannibalization).
These trends stem from basin maturation: prime locations are largely drilled, leading to deteriorating rock quality. Efficiency improvements (longer laterals, better completions, consolidation by majors like Exxon/Chevron) have partially offset this, allowing total basin production to remain high or grow modestly into 2025 (~6.5-6.8 million b/d peaks), but they are no longer fully countering geological limits.
Overall Permian output is entering a "high plateau" phase in 2026, with forecasts from EIA, Novi Labs, and Wood Mackenzie showing flat or slight declines (e.g., sub-6.5 million b/d possible in early 2026), driven partly by falling rig counts (down to ~250-300) outpacing remaining efficiency gains.
Sources: Goldman Sachs Research (2024-2025), Morgan Stanley (2025), EIA Drilling Productivity Reports/Short-Term Outlooks (2025), Novi Labs/Enverus analyses, Reuters, and independent analysts like Art Berman. No major source reports sustained per-well productivity increases in 2025 data.
Venezuela has the largest proven oil reserves. It’s relatively close to the US, there’s little to no ability for them to seriously defend against the US. It was a no brainer tbh. Trump ensuring a western hemisphere asset is in our hands and will be run by US majors and not exported to China is a layup to be honest. He is right that really this should have been done awhile ago .