ONG Report: US Output Peaks in Data Vacuum as Global Risks Escalate

US Output Peaks as Data Goes Dark

Global Risks Rise: 6 Investor Takeaways

U.S. crude production has just set a new record at the same time that a key export dataset has temporarily gone offline and kinetic risks are rising in the Black Sea. For investors, this week’s developments tell a single story: supply remains abundant, but the system that moves and measures those barrels is under growing strain.

Below are six key takeaways for Bass EXP partners.

1. Sable Offshore vs. California: Regulatory Risk on Display

The “Texas producer” in recent headlines is Sable Offshore Corp. Sable acquired the Santa Ynez Unit (SYU) platforms and related Las Flores onshore and pipeline assets from ExxonMobil, aiming to restart offshore production off Santa Barbara, California.

Where the assets stand

• The Santa Ynez Unit is a high‑quality offshore asset that has historically produced more than 28,000 barrels per day.
• The Las Flores pipeline and onshore facilities have been shut since the 2015 Refugio spill.
• Sable has restarted limited production from the platforms into onshore storage, but without a functioning pipeline or full onshore permits, most of that production remains stranded.

Q4 2025 developments

Two decisions crystallized the regulatory blockade in late 2025:

1. Tentative court ruling – October 14, 2025
   • A California Superior Court issued a tentative ruling rejecting Sable’s claims that the California Coastal Commission (CCC) had overstepped its authority.
   • If adopted as a final ruling, this reinforces the CCC’s ability to delay or deny restart permits on environmental grounds.
2. County vote – November 4, 2025
   • The Santa Barbara County Board of Supervisors voted 4–1 to direct staff to prepare findings to deny the transfer of key onshore infrastructure permits from ExxonMobil to Sable.
   • A final vote is scheduled for mid‑December, but the direction of travel is clear: regulators are comfortable stranding offshore barrels if they judge the environmental risk to be too high.

Financing under pressure

Regulatory delays have translated directly into balance‑sheet stress:

• Capital raise: In early November, Sable raised about $250 million via a private placement (PIPE) to stabilize liquidity and fund its legal strategy.
• Short-seller pressure: A subsequent short‑seller report alleged that Sable had “weeks of cash remaining” and faced bonding issues. Sable publicly disputed those claims and said its bonding obligations with ExxonMobil remained in good standing.

Investor takeaway

For investors, Sable’s situation is a live case study in “permit purgatory”:

• Geology can be excellent and infrastructure largely in place, yet state and local permitting risk can effectively zero out asset value.
• In jurisdictions with aggressive decarbonization policies, the subsurface barrels must be discounted for the probability that they will never be legally produced, regardless of technical viability.
• When underwriting similar opportunities, investors should explicitly model:
  • Time to permit (and the chance of never receiving one)
  • Carrying costs while stranded
  • The need for dilutive capital raises if timelines slip

2. Record U.S. Output in a Soft Price Environment

Despite a relatively weak price tape, U.S. crude oil production hit a new all‑time high of 13.84 million barrels per day in September.

What drove the new high

Growth is not uniform across the country:

• New Mexico (Permian side): Reached roughly 2.35 million bpd, setting a new state record.
• Federal Gulf of Mexico: Climbed to about 1.98 million bpd, its highest level since early 2020.
• Other regions were flat to slightly down, highlighting how a handful of basins now carry the growth story.

This combination pushes back against the idea that U.S. shale has “fully plateaued.” Instead, the data shows:

• Short‑cycle shale in places like the Delaware Basin remains highly efficient.
• Long‑cycle offshore provides a stable base that can grow even when onshore drilling moderates.

Why this matters now

• The production record arrives while Brent and WTI prices have softened compared with a year ago.
• Rising volumes in a weaker price environment reinforce the market’s oversupply narrative, limiting upside even when geopolitical risks flare.
• For investors, this argues for disciplined price decks in project modeling and extra attention to breakevens – not just in shale, but in mature onshore plays as well.

3. The Export Data Gap: Trading with a Blindfold

At the exact moment U.S. output hits a record, a key piece of federal data has gone missing.

What happened

• The Energy Information Administration (EIA) relies on the U.S. Census Bureau for official trade (export) figures.
• Due to a funding lapse and related “irregularities” in the trade data, Census could not deliver final export numbers for September on schedule.
• As a result:
  • EIA’s September Petroleum Supply Monthly was forced to reuse August export figures as placeholders.
  • Some weekly export series have been temporarily suspended while the underlying data is reviewed.

Market impact

• Without reliable export data, the market cannot clearly see:
  • How much of the record U.S. production is leaving the country
  • How much is building in storage
• Traders and analysts are effectively working with “frozen” demand figures until revised data arrives.
• This increases the risk of sharp price moves when the true numbers are finally published and the balance sheets are reconciled.

Investor takeaway

For Bass EXP investors, the message is less about short‑term trading and more about signal quality:

• High‑frequency data can temporarily mislead, especially when one node in the federal statistical system stalls.
• When evaluating hedging, storage, or marketing strategies, it is worth remembering that headline data is occasionally revised significantly after the fact.

4. Black Sea Escalation: The Shadow Fleet Under Fire

The geopolitical risk premium returned to the Black Sea with two incidents involving tankers tied to the Russian “shadow fleet.”

The incidents

• On November 28, 2025, two sanctioned tankers – Kairos and Virat – suffered explosions and fires in the Black Sea near the Turkish coast.
• Both vessels are associated with the sanctioned Russian oil trade and appear on Western sanctions lists.
• At the time of the blasts, both tankers were reportedly in ballast (without cargo), moving between load and discharge positions.
• Turkish authorities described the damage as the result of an “external impact” and opened investigations. Public reports have not definitively confirmed whether the cause was sea mines, drones, or another mechanism.

Why this matters even without spilled cargo

• Even with no oil spill, the events show that hulls and crews are now direct targets in a heavily militarized sea.
• A shadow fleet that was once viewed as a low‑visibility workaround is becoming a high‑risk operating environment:
  • Insurers may raise premiums or refuse coverage for certain routes.
  • Some shipowners and captains may simply avoid the area, shrinking effective capacity.
  • The cost of moving each marginal barrel of Russian crude could rise, widening the discount on those barrels relative to global benchmarks.

Investor takeaway

• For global markets, the immediate physical impact is limited, but the trend is important:
  • Sanctions are shifting from purely financial tools to a physical contest over ships and infrastructure.
• For investors, this adds another variable to price volatility and differentials:
  • Russian barrels may stay on the market but at steeper discounts and with more frequent logistical disruptions.

5. Deep Strike on Saratov: Refining Capacity in the Crosshairs

At roughly the same time as the tanker incidents, Ukraine continued its campaign of long‑range drone strikes on Russian energy infrastructure.

The Saratov refinery

• Ukraine has publicly claimed responsibility for drone strikes on the Saratov refinery, a Rosneft facility located hundreds of kilometers from the front line.
• The plant processes roughly 7 million tons of crude per year, making it a meaningful component of Russia’s downstream system.
• Attacks in November prompted fires and a shutdown of key units, forcing at least temporary curtailments in processing.

Strategic pattern

Saratov is part of a broader pattern:

• Ukrainian forces have targeted refineries, storage depots, and export terminals in Russia and occupied territories.
• The objective is straightforward:
  • Degrade Russia’s ability to refine and move products
  • Increase domestic fuel tightness inside Russia
  • Reduce export revenues from diesel, gasoline, and other products

Investor takeaway

• For now, these outages are manageable for global supply, but they create:
  • A higher floor under refining margins in some markets
  • The possibility of regional product shortages if strikes escalate or cluster around key hubs
• This is another reason to treat refined product price risk differently from crude price risk in portfolio planning.

6. The Strategic Role of U.S. Offshore Production

Amid these moving parts, one constant is the critical role of offshore production in the U.S. supply stack.

Offshore by the numbers

• Offshore platforms, primarily in the federal Gulf of Mexico, deliver roughly 15% of total U.S. crude oil output.
• In September, Gulf of Mexico production rose to about 1.98 million bpd, its highest level since 2020.
• New deepwater projects coming online are expected to hold or slightly grow this share over the next couple of years.

Why offshore barrels matter

• Offshore projects are long‑lived, baseload producers:
  • They decline more slowly than shale wells.
  • They provide steady volumes that shore up national supply, even as onshore activity cycles up and down.
• For a country that is now a top global exporter, the reliability of these offshore volumes is strategically important.

Investor takeaway

• Offshore production is not simply a legacy component; it is a core pillar of U.S. energy security.
• Any policy moves that significantly constrain offshore development – or major hurricane seasons that shut platforms in – will have an outsized impact on national output and export capacity.

Putting It Together: Fragmented Security, Abundant Barrels

Taken together, late‑2025 developments paint a picture of an energy system that is:

• Geologically abundant – U.S. subsurface endowment and offshore capacity continue to deliver record volumes.
• Operationally resilient but stressed – Offshore platforms, pipelines, and refineries are still doing the heavy lifting, but they face growing regulatory and physical threats.
• Information‑impaired at the margins – The export data blackout is a reminder that even sophisticated markets sometimes operate with partial information.
• Geopolitically fragmented – The Black Sea tanker incidents and refinery strikes in Russia show that energy logistics are now a direct theater of conflict, not just a background factor.

For Bass EXP investors, three practical implications stand out:

1. Regulatory underwriting is non‑optional.
   • Sable’s standoff in California shows that permits, local politics, and environmental liabilities can dominate project outcomes, even in OECD jurisdictions.
   • When evaluating deals, treat permitting and community risk as core drivers of value, not afterthoughts.
2. Expect episodic volatility around incomplete data.
   • With record U.S. output, small shifts in exports or inventories can move prices.
   • Temporary data gaps (like the current export freeze) can increase the chance of short, sharp moves when revisions land.
3. Geographic diversification has real value.
   • Concentration in any single basin, jurisdiction, or transport route carries more risk today than a decade ago.
   • Exposure to stable onshore plays – such as the types of Oklahoma projects Bass EXP focuses on – can complement portfolios that already hold offshore, shale, or international risk.

Industry Tidbit

Offshore platforms still deliver roughly 15% of U.S. crude production – a reminder that, despite the shale boom, coastal and offshore assets remain crucial baseload contributors to national supply.

At Bass EXP, we don’t just follow the news – we use it to sharpen how we think about risk, timing, and structure in direct participation drilling programs. If you’d like to discuss how these dynamics affect onshore projects in Oklahoma and similar basins, our team is always available to walk through the details.