The Welfare Economics of Oil Exploration (Fanny Henriet) Despite growing calls to phase it out, oil exploration persists. This paper quantifies the global welfare and environmental impacts of restricting oil exploration. We develop a global dynamic model calibrated to a granular dataset of 14,637 proven oilfields, accounting for heterogeneity in private extraction costs, capacity constraints, life-cycle carbon intensities of oil barrels, along with exploration dynamics and basin-specific estimates of yet-to-find resources. Across various market structures (perfect competition, cartel-fringe with OPEC as dominant firm, perfect collusion of oil producers), we find that exploration restrictions are an effective second-best climate policy: in the absence of a global carbon tax, a universal ban increases global welfare by $12.5 trillion due to lower social costs of oil production and use (assuming a social cost of carbon of $200/tCO2eq). A partial ban by OECD and BRICS countries alone captures 66% of these gains. Under optimal carbon pricing, however, a global ban yields a modest $0.3 trillion welfare loss, as it precludes access to lower-social-cost deposits and prevents the easing of short-run capacity constraints.