Markets do what markets do, so said Chris Wright, America's energy secretary, at CERAWeek, an industry jamboree in Houston. Despite war and oil market gyrations, good times were to be had in America's shale capital. If oil prices average $100 over the year, American oil firms will enjoy a windfall of over $60bn, according to Rystad. LNG pedlars also stand to benefit, with Venture Global's share price doubling in the past month.
However, there are reasons to temper the enthusiasm. The war's uncertain duration, lack of supply response, and demand destruction are all concerns. Shale executives intend to stick to capital discipline, and it may take two quarters of $100 oil and a soaring futures curve to persuade them to expand capital expenditure.
The natural-gas market in America may prove even less responsive, with low prices prevailing at the Henry Hub, the domestic benchmark. This makes it unlikely for the Iran conflict to drive US natural-gas production growth in the short to medium term.
While America's oilmen are celebrating now, the mood may be less buoyant next year as the long-term effects of the war become clearer.
