Bumping along the desolate highways of the Permian Basin, the world’s busiest oil field, there are long stretches where all you see are drilling rigs, sage brush and miles upon miles of sand. That’s why it’s so strange that Texas crude producers are facing a sand shortage of more than 1 million tons and prices that have jumped 150%.
Frack sand, which gets blasted through shale rocks to unlock oil and natural gas, is at about $55 a ton, up from $22 at the end of 2021, data on spot prices from energy-research firm Lium show. Demand is climbing as oil explorers turn the taps back on after Covid-driven cutbacks. But like in so many pockets of the economy, the recovery is sparking a mismatch. Sand suppliers have seen disruptions, labor shortages and trucking bottlenecks. The chief executive officer of US Silica Holdings Inc., the largest publicly traded frack-sand miner, has dubbed the tight market “sandemonium” and said his company is sold out.