-- US shale producers face strong economics with breakevens near $43 per barrel and WTI around $70/bbl, supporting moderate growth despite war-driven volatility, Macquarie said Friday.
WTI for calendar 2027 has climbed into the low $70s per barrel from the low $60s before the conflict, while US exploration and production budgets point to breakevens near $43 per barrel, Macquarie said.
Higher prices are improving returns, prompting smaller producers to consider incremental activity while larger firms maintain capital discipline, Macquarie added.
Even with limited reinvestment, current pricing could drive a step-up in 2026 output growth among larger companies.
Geopolitical risks are supporting longer-dated oil prices and shaping company strategies, following a shift from earlier bearish shocks to more recent bullish disruptions, Macquarie said.
Macquarie estimates 2026 breakevens at about $43.40/bbl across a group producing roughly 5.8 million barrels per day, down from about $44.50/bbl in 2025 and $46/bbl in 2024.
The Russia-Ukraine war lifted US liquids output by about 2.4 million b/d by year-end 2023 compared with 2021, highlighting shale responsiveness, the research firm added.
US production rose about 0.8 million b/d in 2025 despite average prices near $65/bbl, and could reach 0.7 million b/d to 1 million b/d growth annually at $70-plus per bbl prices, Macquarie said.
Weekly oil balances show implied US supply near 13.6 million b/d, reflecting strong output following recovery from earlier disruptions.
Producers may need to add about 20 to 40 rigs to shift production trends, though companies have only signaled early gains in completion activity so far, Macquarie added.
Efficiency gains continue to lower costs in the Permian Basin, particularly in Texas, helping offset weaker price environments and supporting output, the firm added.
Permian output growth slowed to about 300,000 b/d in 2025 from about 370,000 b/d in 2024 but remains strong, with acceleration possible by late 2026 or early 2027, Macquarie noted.
Labor activity in the Permian has remained elevated and broadly flat year over year, indicating stable operational capacity.
Survey data from the Dallas Federal Reserve shows 35% of producers expect less than 90% of shut-in Gulf supply to return, while 86% see future Hormuz disruptions as likely, the firm noted.
About 40% of producers do not expect Hormuz flows to normalize by August, reflecting ongoing uncertainty around global supply routes, Macquarie added.
Companies are increasing hiring plans, signaling early-stage growth momentum as improved efficiency and higher prices support a cautiously optimistic outlook, the firm added.