Axios

The issue

Big international oil powerhouses (ConocoPhillips, Statoil, Shell) are pulling out or retreating (ExxonMobil) from their Canadian oil sands investments — a seemingly counterintuitive strategy given that the Canadian oil sands are the third largest reserve of crude oil in the world.

The facts

They're reconsidering to save on costs. The oil sands in Canada have some of the highest operating costs in the world paired with low profits. Plus, Canadian oil sands have greenhouse-intensive sources of crude oil and have limited pipeline access to markets, which leaves little flexibility for oil companies.

Instead, some big oil is seeking out lower-cost and higher-stability operations in the Permian Basin in New Mexico and Texas, the second largest oil field in the world whose crude production increased in all but three months last year. Crude oil is expected to increase to 2.4 million barrels per day in May, according to the EIA.

ExxonMobil, Shell, and Chevron (also considering leaving the Canadian oil sands) are already in on these advantages — they invested $10 billion this year in the Permian Basin. ConocoPhillips has legacy acreage in the basin, and is likely to increase production this year, too, per The Motley Fool.

Why it matters

Companies' departure from Canada's oil sands came as a shock on Wall Street, but it is becoming more common.

Plus, this will shift international energy dynamics: Saudi Arabia, which has the largest oil field in the world ahead of the Permian Basin, could be weakened by this competing investment. And many of the Canadian companies now have room to nudge into their own oil sands and consolidate their ownership, giving them a competitive edge.