Oil and gas executives across the southwestern US are expressing concern over new tariffs and mixed signals from Washington, DC, even as the White House calls on domestic producers to ramp up output, according to the latest Federal Reserve Bank of Dallas energy survey.
Released 26 March, the quarterly survey captures business activity and sentiment across the Federal Reserve’s 11th District, which includes Texas, northern Louisiana, and southern New Mexico.
The survey polled 130 executives between 12 and 20 March—88 from exploration and production (E&P) firms and 42 from oilfield services companies.
Executives predicted a West Texas Intermediate (WTI) spot price averaging $68/bbl over the next 6 months and $70/bbl a year from now. Longer-term forecasts showed increasing optimism, with expectations rising to $74/bbl in 2 years and $82/bbl in 5 years.
By year-end, most respondents anticipated WTI prices between $65 and $75, with the median forecast at $68/bbl. That compares with an average price of $67.60/bbl during the survey period.
On the natural gas front, 117 executives weighed in with an average Henry Hub price forecast of $3.71/MMBtu over the next 6 months and nearly $4.00/MMBtu after one year. Forecasts rose to $4.30/MMBtu in 2 years and $4.83/MMBtu in 5 years. US gas prices averaged $4.10/MMBtu during the reporting period.
Breakevens and Regulatory Costs in Focus
The survey also asked about breakeven prices. All respondents said they could cover operating costs at current oil prices. The average breakeven was reported at $41/bbl, up $2, or 5%, from a year ago. Breakeven estimates ranged from $26 to $45/bbl across all firms.
Larger producers—those pumping 10,000 B/D or more—said they require a spot price of $31/bbl to cover operating expenses. By contrast, smaller operators producing less than 10,000 B/D cited a breakeven price of $44/bbl, marking a more than 40% difference.
On regulatory compliance, 49% of executives reported associated costs of $0.00–$1.99/bbl. Another 28% estimated costs between $2.00 and $3.99/bbl. Some 15% pegged the burden at $4.00 to $5.99/bbl, while 9% said regulatory costs were $6.00/bbl or higher.
Executives Voice Concern Over Mixed Policy Signals
While the survey’s comments reflected a range of views, many cited “uncertainty” as a defining feature of the current landscape—despite efforts by US President Donald Trump to promote fossil fuel production and scale back environmental regulations.
“The key word to describe 2025 so far is ‘uncertainty’ and as a public company, our investors hate uncertainty,” wrote one executive from an oil and gas firm.
They added, “At $50/bbl oil, we will see US oil production start to decline immediately and likely significantly (1 million B/D-plus within a couple quarters). This is not ‘energy dominance.’ The US oil cost curve is in a different place than it was 5 years ago; $70/bbl is the new $50/bbl.”
Another producer took direct aim at the 25% tariff applied to steel by the White House on 12 March, saying the costs of steel products such as casing and tubing increased by a quarter overnight, even for inventory already in the US.
“US tubular manufacturers immediately raised their prices to reflect the anticipated tariffs on steel. The threat of $50 oil prices by the administration has caused our firm to reduce its 2025 and 2026 capital expenditures,” the executive said.
Others noted that the tariffs had yet to impact their operations. Some suggested the administration’s broader energy agenda would be a net positive, particularly for natural gas producers.
“The rate of accomplishment of the administration’s policy agenda will impact prices for natural gas in a favorable way. Killing the climate change policies and instigating [liquified natural gas] exports, along with the increase in manufacturing and artificial intelligence demands, will increase natural gas consumption,” said one respondent.
Services Sector Echoes Tariff Concerns
Oilfield service firms participating in the survey largely mirrored the concerns voiced by producers.
One executive reported that a client asked their company to relocate a manufacturing unit from Canada to the US due to trade tensions.
“Uncertainty around tariffs and trade policy continues to negatively impact our business, both for mid- to long-term planning and near-term costs,” the respondent wrote.
Some service executives also pointed to ongoing consolidation and a focus on capital discipline amongst operators as key reasons for a weaker-than-expected business outlook.
Still, not all respondents were downbeat. One service company executive kept things brief: “We are all busy here.”
