U.S. shale producers are facing a growing challenge in boosting crude oil output after the number of drilled-but-uncompleted wells (DUCs) fell to the lowest level on record, limiting the industry's ability to quickly respond to soaring global demand caused by the ongoing U.S.-Israeli conflict with Iran.
The disruption of Middle Eastern oil supplies following Iran's effective closure of the Strait of Hormuz has pushed buyers in Asia and Europe to seek alternative sources, driving a surge in U.S. crude exports and refinery activity.
As a result, U.S. crude inventories have declined sharply. Government data showed crude stockpiles fell by 12.4 million barrels during the week ending May 22, dropping to 806.8 million barrels, the lowest level since January 2025. Total inventories have fallen by approximately 52 million barrels since the conflict began.
DUCs—wells that have already been drilled but are awaiting completion—are traditionally one of the fastest methods for increasing production. These wells can begin producing oil within six to nine weeks, compared with three to nine months for newly drilled wells.
However, the U.S. Energy Information Administration (EIA) estimates there were only 4,972 DUCs nationwide in April, the lowest level since records began in 2013. The decline follows 14 consecutive months of inventory reductions as producers completed previously drilled wells to cut costs during a period of lower oil prices.
Industry experts note that completing an existing well typically costs between $5 million and $6 million, compared with $8 million to $10 million for drilling and completing a new well, making DUCs an attractive source of near-term production growth.
Linhua Guan, Chief Executive Officer of Surge Energy, said oil-focused operators with significant DUC inventories are likely to accelerate completions in the coming months to capitalize on higher crude prices.
Analysts at energy consultancy Rystad Energy said low DUC levels have reduced the industry's flexibility to rapidly increase supply, despite attractive market conditions.
Consultancy Enverus estimates the effective DUC inventory is even lower, at around 3,866 wells, after excluding older wells unlikely to be completed due to infrastructure limitations, technical issues, or ownership changes following industry consolidation.
The situation is particularly noticeable in the Permian Basin, America's largest oil-producing region. According to Rystad, the basin's DUC inventory has fallen to approximately 540 wells in May, down from 609 before the Iran conflict began.
Despite the tight inventory, producers are beginning to respond to stronger oil prices.
Diamondback Energy recently increased its 2026 production outlook and plans to draw down more of its DUC inventory while adding drilling rigs and completion crews during the year.
Hydraulic fracturing activity is also accelerating. Energy consultancy Primary Vision reported that the number of active frac crews has risen for five consecutive weeks to 189 crews, representing a 21% increase since the beginning of the year.
The EIA recently raised its forecast for U.S. crude production in 2026 to 13.65 million barrels per day, up from its previous estimate of 13.51 million barrels per day.
Higher future oil prices are encouraging producers to drill new wells and rebuild DUC inventories. November crude futures are trading around $78 per barrel, a level many operators consider attractive enough to support new drilling investments.
Enverus reported that DUC inventories have already started showing signs of recovery, rising above 4,100 wells by May 20 after previously falling below 4,000.
Major producers are also expanding drilling programs. ConocoPhillips plans to add another drilling rig this year, while drilling contractor Patterson-UTI expects to increase its active rig fleet during the second half of 2026.
According to Baker Hughes, the U.S. onshore oil rig count has climbed for four consecutive weeks, reaching 425 rigs, the highest level since July 2025.
Industry executives say customer demand for additional drilling capacity is increasing, suggesting U.S. shale producers are preparing for a prolonged period of elevated oil prices and strong global demand.
While U.S. shale remains one of the world's most flexible sources of oil supply, the record-low backlog of drilled wells highlights the challenges producers face in rapidly replacing inventories as geopolitical tensions continue to reshape global energy markets.
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