Iran War Drives Rise of Americas Oil Production, Pressuring OPEC Pricing Power
nashnova research
Seven months into the Iran war, attacks on the Strait of Hormuz have knocked out over 2 billion barrels of global crude supply — Americas oil output is set to rise 10% in two years, tilting pricing power westward.
How has this war reshaped global oil supply?
The Trump administration's war on Iran is now seven months old. Attacks on the Strait of Hormuz have cost the global market more than 2 billion barrels of crude.
Oil, LNG, and refined-product prices have surged. Buyers and investors are pivoting to the Americas, signing long-term supply contracts.
This means → the Middle East is no longer the default supplier; capital and orders are voting with their feet.
Rystad Energy forecasts that combined North and South American output will grow roughly 10% in the two years to December 2026.
Which countries are leading the charge?
The U.S. has increased crude and diesel exports to Europe, Asia, and Oceania by 15%.
Venezuela: after the arrest of Nicolás Maduro in January, international oil companies were invited to invest $100 billion to restore pre-socialist peak output of 3 million barrels per day. Output has already jumped ~10% to roughly 1.2 million bpd this year.
Argentina sits on Vaca Muerta — one of the world's largest shale formations. In September, total exports topped $10 billion for the first time, with surging oil output a key driver.
In plain terms = three countries are ramping up at once; the Western Hemisphere's oil taps are opening wide.
How much are the majors betting on Argentina?
TotalEnergies this month announced $10 billion in Argentine investment for new offshore development and onshore gas expansion.
U.S. shale magnate Harold Hamm in August launched a multi-billion-dollar drilling program in Vaca Muerta.
Chevron has lifted output at the El Trapial shale field from 5,000 bpd to 40,000 boe/d in three years. It plans $13.8 billion over the next decade to triple its Argentine output.
This means → international capital is not just "bullish" on the Americas — it is locking in capacity with nine- and ten-figure commitments.
Can OPEC hold on to its pricing power?
Rystad analyst Schreiner Parker: the Western Hemisphere's production surge has stripped the GCC — especially Saudi Arabia — of its medium-term pricing dominance.
Venezuela, Argentina, Guyana, the U.S., and Canada will all play a role in the new landscape.
This reflects a deeper shift: the oil market is moving from single-pole dominance toward a multipolar contest.
Can the Americas truly become a counterweight to the Middle East in global oil pricing?
BULL
Output is already delivering
Multiple countries are hitting record production; tens of billions in investment keep flowing in.
Supply chains are being redrawn
Yergin notes even Gulf states are investing in the Americas for diversification.
BEAR
Cost gap remains
Analysts say the Americas cannot fully replace low-cost Middle Eastern supply.
Sustainability uncertain
Output growth depends on whether investment continues to convert into actual barrels.
In plain terms = the Americas are eating into the Middle East's share, but full replacement faces two hurdles — cost and staying power — that are not yet cleared.
What does this mean for global oil prices?
Analyst consensus: Americas output growth is easing global prices and will continue to compress OPEC's pricing space.
Chevron Argentina GM Ana Simonato says the Middle East conflict has sent a clear signal on the importance of strategic diversification — "That is exactly why Argentina is becoming more prominent in the global portfolio."
The U.S. Export-Import Bank last month announced $7 billion in financing for Argentine energy and critical-minerals development.
This means → regardless of how the war unfolds, the Americas' weight in global oil will not return to where it was.
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