By Sam Irvani, August 18, 2026

Since late February, when hostilities broke out with Iran and traffic through the Strait of Hormuz stopped, calls into our office have ramped up. Advisors, partners, and longtime investors have asked versions of the same question: is Waveland experiencing wild swings in acquisition pricing, and are buyers willing to overpay in a $100 crude oil environment? Spot crude began the year in the low $60s, rose above $100 at the height of the crisis, and has since settled in the low $80s as of this writing. Every headline moves the price.

Our response has been consistent. Our weekly investment and acquisition decisions are not entirely driven by volatile spot prices. There are two components to crude commodity pricing: The first is the spot market — the price on the screen, the one that reacts most to current headlines. The second is the futures curve, which extends many years in the future and are generally tied to broader factors such as inventories, active rigs driving supply, macroeconomic and demand dynamics, etc.  The headline-driven market is where this year’s volatility is playing out. The second is where capital actually gets committed and assets are transacted, and it has spent the year telling a story of substantially greater stability. Reading through the noise means learning to watch the second market. Once an investor does, 2026 stops looking like chaos and starts looking like one of the most opportunistic investing periods we have seen in a few years.

A War Moved the Front of the Futures Price Curve and Left the Back Largely Untouched

Consider a natural experiment that no one could have designed on purpose. Take a snapshot of the WTI futures curve on December 30, 2025, the last trading day of that year. Spot was trading in the low $60s, weighed down by the year’s tariff disputes, and the curve was in contango, with future prices sitting above spot. Take a second snapshot at the end of July 2026, well into an active war, a major crude transport waterway in peril, and a spot price that had touched $100. The front of the curve moved roughly twenty dollars. The back of the curve — contracts stretching into the 2040s — converged to nearly the same level on both dates, in the $63 to $64 range. This is, in our view, the single most overlooked fact in energy markets this year and one that lends to continued stability in Waveland’s underwriting and investing activity. The market is not confused; it is distinguishing between a temporary disruption and factors driving long-term commodity prices.

What the Futures Trading Reflects

The longer horizon of the futures curve holds steady because it has already priced in fundamentals that are potentially overshadowed by the daily headline volatility. Start with commercial crude inventories, the figure frequently quoted and least understood. The U.S. held approximately 411.7 million barrels for the week ending July 17, 2026, roughly 6 percent below the five-year seasonal average and still trending lower. That is tight, but it does not, on its own, prove much. Commercial stocks have moved within a wide historical range for decades — from roughly 310 million barrels in a typical 1990s year to peaks near 540 million during the pandemic collapse. Today’s level is markedly below historical averages. A bullish case built on that print alone overreaches, and dismisses the market’s concern because it misses where the real depletion has occurred.

The figures above exclude the Strategic Petroleum Reserve, and the SPR is where additional support for higher prices going forward may reside.  America’s emergency stockpile peaked near 727 million barrels in late 2009, plateauing into 2010. As of late July 2026, it stood just above 300 million barrels and was continuing to decline. Two events account for most of that decline: roughly 180 million barrels released during the 2022 Russia-Ukraine crisis, and more than 100 million barrels released during the current conflict, a drawdown still underway. Twice in four years, the SPR has absorbed a shock so that American commerce can remain comparatively unphased. That is precisely the reserve’s intended function. But a shock absorber works only while it has travel left, and refilling it will take years, adding demand to the very market it was built to shield. The next disruption will arrive against a substantially thinner cushion. This is what asymmetric risk looks like before it becomes a headline.

The Signal in What Didn’t Move

An important data point that has not shifted materially in the past 24 months, and one that affects inventory levels, is active drilling rig count.  Across the Permian and the Williston, the two basins where we concentrate our capital, active rig counts have been essentially flat since the first quarter of 2024: through the tariff-driven lows, through the spike toward $100. Public operators, large private companies, and private-equity-backed teams alike ran the rigs they already had and contracted no new ones through the price spikes. Anyone who has spent decades in this industry recognizes how unusual that is. In prior cycles, $100 oil typically prompted operators to double rig deployments, and when prices turned, the industry was left holding expensive equipment and diminishing returns. The boom-bust reflex was, until now, effectively built into the shale business model.

The same discipline has shown up in the acquisition market, where we sit directly. In 2022, when the Russia-Ukraine war pushed crude above $120, deal premiums rose almost immediately; the market had not seen that scenario before and paid up accordingly. This year, a comparable spike produced no material change in acquisition premiums, no decline in the quality of opportunities crossing our desk, and no appreciable movements in drilling and completion costs — meaning project break evens remained at lower price target relative to $100 spikes. The industry appears to have studied its own behavior in 2022 and corrected course. Combined with the broader picture of upstream investment down in 2025 and contracting again in 2026 the conclusion is difficult to avoid: supply is being managed with a discipline this industry has rarely sustained, inventories are depleting regardless, and the market is likely sitting in a long-term supply shortage. That leaves us more constructive on long-term WTI than daily commentary would suggest. To be clear, this is not a forecast: we do not underwrite a single well on the assumption of $100 oil. The entire point of watching the second market is that we do not have to.

Discipline Has to Be Met With Discipline

We invest through non-operated working interests — direct ownership stakes in drill-ready development projects — alongside established public and large private operators in proven basins: the Williston, the Permian, and the San Juan. The operator contributes what only an operator can: rigs, crews, and decades of accumulated basin knowledge. We contribute underwriting at the asset level, well by well, across engineering, geology, land, and economics. We hold ourselves to the same standard to which the futures market holds the industry: every acquisition is underwritten against the long-term futures curve, across the full thirty-year economic life of the wells, at roughly $63 to $70 a barrel not at $110. The market has never paid us to assume $110, and an operator’s discipline is of limited value to investors if their capital partner abandons its own the moment spot prices turn exciting.

Structured this way, the two markets work in tandem rather than in tension. A producing well sells its barrels at today’s spot price, not at the price at which it was underwritten. When geopolitical events push spot into the $80s or higher, that flows directly into higher current income, distributions, and reinvestment in new wells; the volatility that unsettles the paper trader is, for the owner of production, simply revenue arriving ahead of schedule. Meanwhile, downside risk remains anchored where it was underwritten: on the stable long end of the curve – income when prices spike, resilience when they settle, and a revenue stream tied to molecules and proved geology. That combination is largely absent from income allocations built on credit, real estate, and dividend equities.

The noise will not stop. This year alone, the oil market absorbed a war, the closure and reopening of one of the world’s most important chokepoints, and 10+% weekly swings, while the strategic reserve fell to a multi-decade low, rig counts held steady, and the back of the curve barely moved. Both markets are real, but only one of them compounds. Investors can trade the first and be right about the next headline, or wrong, or they can own the second, where disciplined supply, depleted inventories, and thirty-year economics are quietly doing the work. We made that choice some time ago.

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