The other issue is that over the years, there has been a lack of investment in training people to do the job. Instead, oil prices were so low for so long that people were being laid off. Now the industry is finding itself competing for talent and equipment, and it’s coming at a premium.
Further compounding the problem is that Saudi Arabia and Russia are reluctant to enter into any production contracts, because they believe that the price spike is artificial and that increasing supplies would just lead to a crash.
As long as oil prices remain high, the rush to find new oil could continue to benefit oil-exploration ETFs:
- iShares Dow Jones US Oil & Gas Exploration Index (IEO), up 23.4% year-to-date
- SPDR S&P Oil and Gas Equipment & Services (XES), up 19.8% year-to-date
