By Patti Domm
The war in Iran is accelerating oil and gas companies' hunt for new drilling opportunities outside the U.S. and pushing their search into far-flung places.
It's "an old-fashioned land grab," Bob Fryklund, S&P Global's chief upstream energy strategist, said of the industry's rush to acquire new acreage.
"Each company has a different strategy," he noted while speaking this week at CERAWeek, an annual energy conference in Houston. "They are all over the map."
Companies are looking for oil in far-away places -- from Sierra Leone to Uruguay, Turkey to Malaysia, Azerbaijan to Argentina. One major reason for the expansive search is that the shale boom that turned the U.S. into the world's largest oil producer could be slowing. Depending on who you listen to in the industry, American shale fields are peaking or are about to peak.
At CERAWeek, ConocoPhillips CEO Ryan Lance said providing new oil supply as shale plateaus is one of the industry's big challenges. He expects U.S. production to peak at just over 14 million barrels a day in the next couple of years. Production is currently at 13.6 million barrels a day.
"U. S. shale maturity is a real phenomenon," Dan Pickering, chief investment officer at Pickering Energy Partners, told Barron's. "The U.S. energy business is going to have to get more risk tolerant and spread their wings outside the U.S."
The Iran war is compounding the pressure to do so. Restarting production at facilities in the Middle East after the war could take weeks or months. Governments will also be rebuilding stockpiles they have released to dampen prices. That buying spree could keep prices elevated, even after the conflict ends.
Pickering said higher oil prices means oil companies will have more funds to deploy on exploration. Those that venture further afield as shale matures could benefit most.
"The world spent 20 years consolidating and being super focused in fewer areas," Pickering said. "We are heading in another direction in the next decade, and the companies that had a head start will have an advantage."
He cited Texas-based petroleum companies Murphy Oil and Apache Oil, a subsidiary of APA, as firms that have already established international footholds. He thinks the rest of the industry will probably follow their lead in the next few years.
"What is happening in Iran is going to accelerate that," he said.
Countries around the world are using this moment to appeal to the industry for investment. At CERAWeek, Canada promoted its plans to build out its energy infrastructure so it can export more natural gas and oil to other parts of the world. Officials from Turkey, Angola, Nigeria, Namibia, Brazil, and Mexico, among others, were also active at the conference.
Greece's Environment and Energy Minister Stavros Papastavrou told Barron's at CERAWeek that his country recently saw its first natural gas exploration in 40 years. The effort was led by Chevron and Exxon Mobil.
It's still early days in the exploratory push, and actual drilling on new land acquisitions could be years away, Fryklund from S&P Global noted.
And despite increased profit from higher oil prices, companies will probably keep a tight lid on costs. They have become more disciplined in recent years, sharing their profits more generously with shareholders in the form of dividends and buybacks. Dividends and buybacks from BP, TotalEnergies, Chevron, Shell, and Exxon Mobile hit a record-high $119 billion in 2024. So while cash flow from war-related oil price spikes could be funneled into more exploration, it may also land in shareholders' pockets.
The war in Iran has also highlighted the risks of operating in far-away regions. In the past few weeks, Iranian attacks have damaged Exxon Mobil's part-owned Samref refinery in Saudi Arabia and a Shell plant in Qatar. Production at Qatargas 3, a Qatari gas field that ConocoPhillips is deeply invested in, has halted due to Iranian missiles.
Executives from the oil majors said at the energy conference that they are focused on the security of their employees and operations in the region. Lance is requesting the U.S. government protect ConocoPhillips' assets in Qatar.
But ConocoPhillips is still building more liquified natural gas capacity in the Middle East. Lance said he is "trying to grow that piece of the company over the long term."
He has a "constructive" long-term outlook of demand and expects ConocoPhillips' recent diversification efforts in Canada, Norway, and Asia to pay off.
Write to editors@barrons.com.
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March 26, 2026 14:13 ET (18:13 GMT)
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