There has been blood in California
For producers, the Golden State has lost its lustre. Drilling is collapsing and output sliding
EVEN in a time of industry-wide cutbacks, California Resources Corporation, a spin off of Oxy Petroleum and one of the state’s largest oil producers, has taken austerity to the extreme. In the face of low prices and high debt, the company has stopped new drilling altogether. Its capital spending cuts have probably been the deepest in the industry, falling from $2bn in 2014 to just $90m this year. Production is falling steeply, with natural decline rates of around 10% a year taking hold. But the austerity-on-steroids approach is keeping the company afloat. California Resources is an extreme case, but a similar retrenchment is underway across California – the third-largest oil-producing state
Also in this section
4 March 2026
The US president has repeatedly promised to lower gasoline prices, but this ambition conflicts with his parallel aim to increase drilling and could be upended by his war against Iran
4 March 2026
With the Strait of Hormuz effectively closed following US-Israel strikes and Iran’s retaliatory escalation, Fujairah has become the region’s critical pressure release valve—and is now under serious threat
3 March 2026
The killing of Iran’s Supreme Leader Ayatollah Khamenei in US–Israeli strikes marks the most serious escalation in the region in decades and a bigger potential threat to the oil market than the start of the Russia-Ukraine crisis
2 March 2026
A potential blockade of the Strait of Hormuz following the escalating US-Iran conflict risks disrupting Qatari LNG exports that underpin global gas markets, exposing Asia and other markets to sharp price spikes, cargo shortages and renewed reliance on dirtier fuels
