By Adam Ferrari, CEO of Phoenix Energy
Energy supply chains are the backbone of global commerce. Every industry — from manufacturing and logistics to retail and technology — relies on affordable and accessible energy to function. Yet, much of the world’s supply still comes from regions marked by political instability. That concentration creates risk for businesses everywhere, far beyond the energy sector.
Throughout my career in the energy sector, I’ve seen how diversification — whether in capital formation, drilling portfolios, or geography — can turn fragility into resilience. In today’s uncertain environment, companies must treat energy supply chain security as a business imperative, not just an energy industry concern.
Geopolitical Risk Is Supply Chain Risk
When OPEC restricts output or conflicts disrupt production, businesses worldwide feel the effects of higher costs and strained logistics. The reality is that global oil demand continues to grow, setting new records year after year. Dependence on imports from volatile regions exposes companies to risks they cannot control.
Domestic production is the most effective hedge against these disruptions. North American shale producers, particularly in basins like the Permian and Williston, have become crucial in balancing the global oil supply. The more diverse our production base, the less influence geopolitical shocks have on energy-dependent industries.
What U.S. Shale Teaches Us About Diversification
The shale revolution showed how diversification can stabilize markets. Expanding development across U.S. basins has reduced reliance on imports from volatile regions. North Dakota’s Williston Basin, for example, is a case study in how regional production enhances the resilience of global supply networks.
But diversification also requires discipline. The best rock in many basins has already been drilled, meaning operators must invest in acreage that has been previously passed over. Thanks to advances in drilling technology and capital efficiency, these areas are now viable. That adaptability is a blueprint for how businesses across sectors should think about their own supply chains: diversify beyond core sources and apply innovation to make new ones productive.
Financial Independence Strengthens Supply Chains
Energy supply chains depend on capital as much as they do on geology. Bringing hydrocarbons from beneath the surface to end-users requires billions of dollars in annual investment. For the industry at large, financial independence functions as a form of diversification.
Companies that broaden their sources of funding, rather than relying solely on traditional capital markets, gain flexibility to allocate investment toward the most economically attractive opportunities, whether in mineral acquisition, non-operated interests, or operated development. That adaptability reduces exposure to any single constraint and mirrors the way businesses in every sector can manage supply chain risk through diversified financing.
Policy Matters
Energy diversification also depends on regulatory environments. In states like Texas, where private mineral ownership streamlines development, supply can be brought online quickly. In regions dominated by federal lands, such as Wyoming’s Powder River Basin, restrictive permitting slows progress — even where geology is strong.
For business leaders, it’s important to see government policy as more than background noise. Policy decisions directly shape the reliability of future energy supply chains, influencing everything from transportation costs to manufacturing competitiveness.
Lessons for the Business Community
Energy supply resilience is not just an oil company issue. Every business leader should recognize that supply concentration creates vulnerability and that diversification creates security.
The world will continue consuming more energy, not less, in the decades ahead. The question is whether supply chains will evolve to meet that demand in ways that protect businesses from geopolitical and market shocks. Now is the time for leaders to treat diversification as a proactive strategy, not a reactive fix.
About the Author:
Adam Ferrari leverages nearly 20 years of experience in the oil and gas industry as a leader at Phoenix Energy One, LLC, focusing on key initiatives for the company’s growth. Raised in an Illinois farm town, he earned his chemical engineering degree magna cum laude from the University of Illinois at Urbana-Champaign. Starting at BP in the Gulf, Ferrari honed his engineering skills, then moved through various leadership roles and a stint in investment banking at Macquarie Capital. His entrepreneurial drive led to the founding of multiple oil and gas ventures. Phoenix Energy is the culmination of all his work experiences and is his most important project yet.
