U.S. Oil Executives Anticipate Modest Production Increase Amid Iran Conflict
A Dallas Fed survey reveals that U.S. oil executives expect a slight rise in domestic production in response to the ongoing Iran conflict, with significant concerns about future disruptions and increased shipping costs.
U.S. oil executives foresee a modest uptick in domestic crude production as the conflict in Iran continues to disrupt global supplies and elevate prices, according to a recent survey by the Federal Reserve Bank of Dallas. The survey, conducted from April 15 to April 20, gathered responses from 120 oil and gas firms, including 78 exploration and production companies and 42 oilfield services firms.
When asked about anticipated changes in U.S. oil production for 2026 due to the Iran conflict, 43% of respondents projected an increase of up to 250,000 barrels per day, while 17% expected a rise between 250,000 and 500,000 barrels per day. For 2027, 32% predicted an increase of 250,000 to 500,000 barrels per day, and 26% foresaw a smaller uptick of up to 250,000 barrels per day. Notably, only 2% anticipated an increase exceeding 1 million barrels per day in 2027.
The survey also highlighted concerns regarding the Strait of Hormuz, a critical passage for global oil shipments. A majority of executives (39%) expected traffic through the strait to return to normal levels by August 2026, while 26% anticipated normalization by November 2026. Additionally, 48% of respondents deemed it "very likely" that geopolitical events would disrupt traffic through the strait again within the next five years, with another 38% considering it "somewhat likely."
Regarding the resumption of shut-in production in the Persian Gulf, 32% of executives believed that 100% of the halted output would eventually return to the market, and another 32% expected more than 90% but less than 100% to resume. However, 15% anticipated that 80% or less of the production would come back online.
Shipping costs from the Persian Gulf are also a concern. More than a third of executives (36%) expected these costs to increase by more than $2 but not more than $4 per barrel once the military conflict ends.
Employment projections within the industry remained relatively stable. Fifty-nine percent of respondents expected their firm's employment levels to remain unchanged from December 2025 to December 2026, while 28% anticipated a slight increase, and only 8% foresaw a decrease.
These findings underscore the industry's cautious outlook amid ongoing geopolitical tensions and market uncertainties.
