Insurers Flock to Oil Projects Outside the Middle East

Global insurers had just shaken off the ESG push from earlier this decade when the Middle East conflict upended oil and gas upstream project coverage. The world’s lowest-cost oil and gas producing region became a war zone at the end of February, with war-risk premiums and oil and gas drilling and construction projects facing either delays or significant cost inflation. Five months of uncertainties about new oil and gas projects in the Middle East have prompted insurance giants to turn to underwriting drilling and project construction…

Industry Background

Upstream activity across major producing basins continues to reflect the balance between capital discipline and the operational pressures of sustaining output. U.S. shale plays — particularly the Permian Basin — remain the swing producer of last resort in global markets, with rig count data serving as a leading indicator for future production volumes.

Exploration and production companies are increasingly focusing on high-return, low-breakeven assets, prioritizing inventory depth in proven basins over frontier exploration spending as investor expectations for free cash flow generation remain elevated.

What to Watch

Market participants will be monitoring rig count trends, quarterly earnings guidance from major E&P operators, and any production adjustment announcements from OPEC+ members for signals on near-term supply trajectory.