U.S. shale producers including Chevron, ConocoPhillips and Occidental cut spending in the first half of 2026 to reduce debt and boost shareholder returns, even as oil prices climbed. The pullback comes as the International Energy Agency says the market is heading toward a supply deficit and the Energy Information Administration expects only modest U.S. production growth this year.
Spending cuts across the shale patch
Chevron and ConocoPhillips spent 10% less on operations in the first six months of 2026, while Occidental cut spending on its Permian Basin operations by as much as a fifth over the same period. APA Corp., HighPeak Energy and Matador also spent less, according to a Bloomberg report cited by Oilprice.com.
The cuts extend a pattern shale majors and Big Oil have followed for years: prioritizing fiscal discipline and shareholder returns over aggressive crude oil drilling. That discipline is holding even though oil prices have risen on a physical supply squeeze, a scenario that would normally reward higher output.
A market heading toward deficit
The pullback comes as the global oil market heads toward a deficit of 1.8 million barrels daily this quarter, the International Energy Agency said in its latest monthly Oil Market Report. U.S. crude production still reached a record 13.714 million barrels daily in May, Energy Information Administration data show, and the drilling rig count is 43 rigs higher than a year ago as of the second week of August.
However, with spending plans as they are, the rig addition rate may change. Shale wells also deplete faster than conventional wells and require more frequent drilling; Enverus estimated in 2024 that shale-patch well productivity had declined by some 15%, a decline drillers offset with longer laterals and other efficiency gains.
Growth has already slowed
U.S. production rose from 8.8 million barrels daily in December 2016 to 11.188 million barrels daily in December 2020, EIA data show — a gain of almost 2.4 million barrels daily in four years that included the sharpest pandemic-driven demand destruction on record. Excluding that disruption, production had already reached 12.865 million barrels daily in January 2020. That put total growth from December 2016 over 4 million barrels daily.
Between 2020 and May 2026, growth slowed to 2.5 million barrels daily. Current output is running slightly below the 13.864 million barrels daily averaged in October 2025. The EIA expects this year's average to reach 13.8 million barrels daily, a modest 200,000-bpd increase from a year ago.
Source: Oilprice.com
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