(Oil & Gas 360) By Greg Barnett, MBA – The difference between Saudi Arabia, Iran, and the United States ultimately resolves into a simple question: how much oil is there, how much can be produced, and how certain is that production? The only way to answer that question rigorously is with numbers.
The United States still possesses a vast hydrocarbon endowment, but most of it exists not as proved reserves, but as resource potential awaiting conversion. The Bureau of Ocean Energy Management’s 2026 national assessment provides the cleanest current benchmark. The U.S. Outer Continental Shelf alone holds a mean estimate of 65.8 billion barrels of undiscovered, technically recoverable oil, alongside 218 trillion cubic feet of natural gas. Within that total, the Gulf of America contains approximately 26.9 billion barrels, while offshore Alaska accounts for 24.1 billion barrels. Onshore federal lands add another 29.4 billion barrels of undiscovered, technically recoverable oil. These numbers establish the foundation: the United States is not resource-constrained. It is conversion-constrained.
That constraint reflects geology. Saudi Arabia and Iran produce from large, continuous carbonate reservoirs with strong natural drive and excellent permeability. These systems historically delivered high production under primary recovery before transitioning into massive, highly engineered secondary systems anchored by water injection. In contrast, the United States has built its production dominance on low-permeability reservoirs that require artificial stimulation. Shale production is effectively accelerated primary recovery, with steep decline rates and continuous reinvestment. Conventional offshore reservoirs in the Gulf of America sit somewhere in between, with higher quality rock but more complex structures, particularly in the deepwater subsalt systems that define current exploration.
Those geological differences express themselves directly in production methodology. Saudi Arabia’s output today is dominated by pressure-managed secondary recovery, with tertiary recovery expanding at the margins. Iran operates similarly but with less uniform reservoir control. The United States remains structurally primary-dominated because shale production overwhelms all other sources of supply. Offshore conventional production exists, but it is a minority share of total U.S. output.
Policy determines how much of the U.S. resource base can move forward along the conversion curve from resource to reserve. Early in 2021, the Biden administration paused new federal lease sales while initiating a review of the leasing system. That decision did not affect existing production, but it directly constrained the intake of new acreage into the development pipeline. Combined with an increase in royalty rates from 12.5% to 16.67% and higher lease costs, the policy environment increased the economic threshold required to convert resources into reserves. Permitting continued, but much of the activity drew from inventory established in prior years.
The structure shifted again in 2025. Legislative changes restored royalty rates toward 12.5%, reduced lease costs, and, most importantly, mandated a steady cadence of lease sales. Offshore, the Gulf of America is now scheduled for dozens of lease sales extending through 2040, creating a durable inventory pipeline. The effect of these changes is not immediate production growth, but a measurable increase in the probability that technically recoverable resources will progress into probable and proved reserves over time.
Within that framework, the transboundary dynamics highlighted by Talos Energy’s Zama discovery sharpen the analysis. Zama, discovered in offshore Mexico, contains an estimated 600 to 800 million barrels of recoverable resources with original oil in place exceeding 1 billion barrels. Critically, the reservoir extends across adjacent blocks, forcing a unitized development structure. This is not an anomaly. It is expected behavior in continuous sedimentary systems. The United States anticipated this decades ago through the U.S.–Mexico Transboundary Hydrocarbon Agreement, which establishes a legal framework for joint development of reservoirs that cross the maritime boundary and allows operators on both sides to cooperate in exploration and production.
The question is whether the United States has access to analogous geology and whether it is actively pursuing it. The answer is yes on access, and mixed on execution. The Western Gulf Planning Area, which lies directly adjacent to Mexico, has been included in lease sales for decades and continues to be offered as part of broad Gulf-wide leasing programs. Recent lease sales have offered as much as 80 million acres across the Gulf, including thousands of unleased blocks spanning deepwater and boundary-adjacent regions. In other words, the acreage exists and is available.
What has varied is the pace of turnover and exploration intensity. The 2024–2029 offshore leasing program under the Biden administration scheduled only three lease sales across a five-year window, the lowest level in modern history. That slowed the rate at which new acreage could be brought into exploration portfolios. The post-2025 framework reverses that trend, mandating frequent lease sales and expanding the opportunity set across all Gulf planning areas.
At the basin level, the areas most analogous to Zama sit within the Western and deepwater Gulf, particularly the Perdido Foldbelt, Alaminos Canyon, and adjacent subsalt trends. These are highly technical, high-pressure, high-temperature environments that require significant capital and advanced drilling capabilities. Major operators in these regions include Chevron, Shell, BP, and Murphy, alongside independent players such as Talos Energy itself. Chevron’s Anchor project and Shell’s deepwater developments illustrate how the industry is pushing into higher-pressure regimes and deeper subsalt structures. These are not exploratory frontiers in the traditional sense, but they remain underdeveloped relative to their geological potential.
The distinction between geology and activity remains central. The Gulf of America still contains nearly 27 billion barrels of undiscovered, technically recoverable oil. That figure alone implies that multiple Zama-scale discoveries are geologically plausible, even if the probability of any single billion-barrel find is lower in a mature basin. The limiting factor is not whether the oil exists. It is whether leasing, capital allocation, and drilling programs are sustained at a level sufficient to convert that resource into reserves.
The conclusion is straightforward. The United States has the geology, the legal framework, and the technology to replicate the kind of success demonstrated by Talos in Mexico. The resource base exists on both sides of the maritime boundary. The difference lies in execution. Reservoirs do not stop at political borders, but development does. The ability to translate shared geology into asymmetric production outcomes depends entirely on how consistently the United States leases, explores, and drills its side of the basin.
By oilandgas360.com contributor Greg Barnett, MBA.
The views expressed in this article are solely those of the author and do not necessarily reflect the opinions of Oil & Gas 360. Please consult with a professional before making any decisions based on the information provided here. Please conduct your own research before making any investment decisions.
About Oil & Gas 360
Oil & Gas 360 is an energy-focused news and market intelligence platform delivering analysis, industry developments, and capital markets coverage across the global oil and gas sector. The publication provides timely insight for executives, investors, and energy professionals.
