YOUNGSTOWN, Ohio – A survey conducted by the Dallas Federal Reserve shows that executives in the oil and gas industry are uneasy over the current U.S. energy environment – citing higher costs, trade issues, lower commodity prices and market uncertainty as major factors.
The Dallas Fed Energy Survey collected data between Sept. 10 and 18 from 139 energy firms based in the southwestern United States that responded to a series of industry questions. Of that number, 93 were oil and gas exploration and production companies, and another 46 were oilfield services firms.
The Dallas Fed’s quarterly survey monitors firms based in Texas, northern Louisiana and southern New Mexico, the most prolific oil-producing region in the country. Some of these firms may also have drilling and production interests in the Utica/Point Pleasant shale formation, which covers much of eastern Ohio, including portions of the Mahoning Valley.
According to the survey, most exploration and production, or E&P, companies responded that they have delayed investment decisions based on uncertainty over the price of oil and higher costs associated with production. The report noted that 42% of the 33 E&P firms that responded said they have delayed investments slightly, while 36% replied they have significantly postponed investment decisions. Twenty-two percent – mostly smaller companies – reported no delays. All respondents and commentaries included in the survey were anonymous.
“The noise and chaos is deafening!” exclaimed one respondent in the survey’s commentary section. “Who wants to make a business decision in this unstable environment?”
“Given the U.S. Energy Information Energy Administration’s forecast for 2026 oil prices averaging $47 per barrel, we are suspending drilling indefinitely,” another survey respondent commented.
Others cited excess global production, tariffs and trade and international tensions as issues pressuring the oil and gas industry.
“The administration is pushing for $40 per barrel crude oil, and with tariffs on foreign tubular goods, input prices are up, and drilling is going to disappear,” one executive answered.
Another executive described the U.S. shale business as “broken,” blaming the Biden administration’s stringent regulatory policies and the Trump administration’s failure to understand the shale exploration business.
“Guided by a U.S. Department of Energy that tells them what they want to hear instead of hard facts, they operate with little understanding of shale economics,” the respondent added. “Instead of supporting domestic production, they’ve effectively aligned with OPEC – using supply tactics to push prices below economic thresholds, kneecapping U.S. producers in the process.”
Onerous regulations in states such as California have also hindered new development, some firms said.
Oil and gas service companies also expressed concerns regarding the tariff environment. “We are suffering from a combination of increased cost due to tariffs and downward pricing pressure from end users,” according to one reply. “Global geopolitical issues and U.S. foreign policy uncertainty are creating increased financial challenges for both our U.S. and international business.”
According to the survey, nearly half of the executives – 49% – responded that up to one-quarter of their oilfield equipment is either directly or indirectly sourced from China. Another 22% said that between 26% and 50% of components or equipment is sourced from China, while 2% replied that between 51% and 75% of their equipment is imported from China.
Another 27% of the industry’s executives responded that none of the firms source equipment from China.
Most of the firms that do import products from China responded, however, that sourcing similar equipment from another country would have little impact on their operations.
The survey found that 79% of these firms believe the impact would be slight, while 14% projected the impact would be significant. Another 27% responded that there would be no impact.
Other survey findings include a 6.5% decline in activity during the third quarter, while the outlook index fell from -6.5% to -17.6%.
On average, respondents to the survey project that Texas crude oil prices should hover at $63 per barrel by the end of 2025, while responses predicted prices to land at $69 per barrel in two years and $77 per barrel five years out. The industry, on average, considers prices below $60 per barrel as insufficient for new drilling and exploration programs.
Since January, West Texas Intermediate oil prices – the benchmark for crude oil – has declined 18%.
A link to the full survey can be found HERE.