Global Price Surge, Demand Fears Create Crosswinds for Bakken

A sustained high-price oil environment driven by Middle East conflict is poised to unlock a massive new wave of supply from South America, potentially reshaping long-term competition for the Bakken, according to new analysis. Rystad Energy has sharply revised its 2026 average Brent crude price forecast from $60 per barrel in January to $89 per barrel today, citing the effective closure of the Strait of Hormuz.

The firm estimates that a $100-per-barrel price could unlock up to 2.1 million barrels per day (bpd) of additional crude supply across South America by the mid-2030s. "South America is now positioned as the world’s most consequential source of incremental supply," said Radhika Bansal, Senior Vice President of Oil and Gas Research at Rystad Energy, according to the OilPrice.com report. She noted the region offers "scale, geologic quality and relative political stability."

This projected surge is centered on offshore developments in Brazil, Guyana, and Suriname, which Rystad says could deliver over 1 million barrels of oil equivalent per day in additional production over the next decade, backed by roughly $33 billion in new capital expenditure. Specifically, ExxonMobil's Yellowtail project in Guyana came online at 250,000 bpd with a target of 300,000 bpd. Venezuela also re-enters the supply picture under a high-price scenario, with potential to add 910,000 bpd by 2035 if sanctions are lifted.

For Bakken operators, the analysis presents a dual-edged sword. The current high price environment—with Brent at $89—bolsters near-term cash flow and drilling economics in North Dakota. However, the long-term prospect of a major, low-cost supply surge from South America could pressure prices and compete for capital in the latter part of the decade. The report highlights that medium crude operating costs in parts of Venezuela are just $7 to $8 per barrel.

Simultaneously, a significant demand-side threat is emerging. According to a separate Rigzone report, the world's top oil traders warn that demand destruction wrought by the Iran war is set to deepen. This suggests the current price spike may be tempered by weakening consumption, creating volatility.

The net effect for the Williston Basin is a market caught between immediate geopolitical price support and longer-term structural shifts. The Rystad report underscores how the Middle East conflict has "exposed how dangerously concentrated global supply chains are around the Strait of Hormuz," accelerating the search for alternative supply sources. While the Bakken remains a critical domestic pillar, its position in a future market flooded with new Atlantic Basin production from South America could become more challenging, especially if the global demand recovery falters as traders fear.