Dallas Fed issues energy survey update highlighting uncertainty among oil and gas executives

The Federal Reserve Bank of Dallas issued an update last week to its quarterly energy survey of sentiment among oil and gas executives. The original survey for the first quarter was issued at the end of March, and included questions on breakeven prices by basin, 2026 drilling plans, expectations for further consolidation among exploration and production (E&P) firms, oil and gas recovery rates and production growth outlooks for US basins and regions, as well as expectations for output from Venezuela.

Owing to the conflict in the Middle East, however, the Dallas Fed followed up with an update on April 23. The update included additional questions on when executives expected traffic through the Strait of Hormuz to return to normal levels and on what their expectations were in terms of the impact of the disruption in the Middle East, both on an international level and domestically.

Data were collected over April 15-20, with responses recorded from 120 oil and gas firms. Of the respondents, 78 were E&P firms and 42 were oilfield services firms.

A majority of the surveyed executives – 39% – said they expected traffic flows through the Strait of Hormuz to return to normal by August 2026. Only 20% expected traffic to normalise sooner, by May 2026. Meanwhile, 26% said they expected traffic flows to return to normal by November 2026 and 14% said they believed it would be later than that.

The majority of surveyed executives said they expected US oil production to increase as a result of the war in Iran. For 2026, a majority of 43% said they expected production to increase by up to 250,000 barrels per day (bpd) compared with prior expectations. For 2027, a majority of 32% of respondents said they expected US production to increase by 250,000-500,000 bpd.

The respondents were given the opportunity to submit comments on the updated special questions and on any other current issues that may be affecting their businesses. Their comments highlighted the high degree of uncertainty affecting the industry. Among E&Ps, one of the respondents pointed to extreme oil price volatility, saying this had left operators unsure whether to increase capital spending and activity. Others noted the difficulties involved in predicting how the energy industry would be affected and how commodity prices and production would behave. Some of the responses mentioned “chaos” and “chaotic” geopolitical events.

Respondents on the oilfield services side had similar comments to make.

“Uncertainty is problematic in the oil and gas business, and this administration is the definition of uncertainty,” one comment from an oilfield services executive said. Another said that the long-term consequences of the war had not been “fully considered”.

“Extended lead times for pipeline products and significantly increased transportation costs, both exacerbated by the shipping crisis in Hormuz, have turned our 12-month projections into logistical jigsaw puzzles,” another comment from a respondent at an oilfield services firm read.

It is notable that the critical comments come from an industry that has tended to be supportive of Republican administrations in general and of US President Donald Trump in particular. Publicly, the industry remains far less likely to criticise Trump, but the anonymous responses to the Dallas Fed reveal a more complicated picture behind the scenes.