U.S. oil producers aren’t coming to the rescue despite high prices as mistrust and chaos hit outlook. The ‘market is being manipulated’

Companies in the heart of the U.S. oil patch don’t plan on opening up the taps anytime soon—even as the recent spike in crude prices offers a windfall opportunity—due to all the uncertainty weighing on the longer-term outlook.

In a survey of oil and gas executives conducted by the Dallas Fed, which covers the prolific Permian Basin, they signaled that supply will not change much.

When asked how much they expect U.S. oil production to increase in response to the Iran war, 30% predicted no change this year, 43% saw an uptick ranging from 1 to 250,000 barrels per day, and 17% put it at 250,000-500,000. Only 1% said they see more than 1 million of additional output.

The outlook was more bullish for 2027, with 24% seeing no change in production, 26% expecting an increase of 1-250,000, and 32% predicting a boost of 250,000-500,000. Still, just 2% anticipate more than 1 million.

For comparison, Goldman Sachs has estimated that Persian Gulf crude output is down by 14.5 million barrels per day, or 57%, from before the Iran war started.

The reluctance of U.S. companies to pump more oil comes despite West Texas Intermediate futures soaring from $57 a barrel at the start of the year to $111 at the height of the war and just below $100 during the past week.

The Dallas Fed survey also tracks with an earlier one it conducted last month that showed half of exploration and production executives said the number of wells their firms expect to drill in 2026 has not changed, and 26% saw only a slight increase.

Comments collected anonymously by the latest report revealed that the extreme volatility in prices recently had created too much uncertainty, dampening capital spending views.

“Even after nearly a month of oil above $90 per barrel, rig counts declined, signaling little confidence that prices will hold,” one respondent said. “Closing the supply gap from the Iran conflict will require greater certainty and higher 2027 future prices to incentivize additional rig and frack deployments.”

Another noted that “with all of the chaos, predicting anything in the energy sector is very difficult.”

Executives also appeared to refer to President Donald Trump’s habit of using social media to jawbone energy prices lower and stock markets higher.

That’s as Wall Street has emerged as a notable check on his policies as previous selloffs have prompted him to back off from his most punitive tariff rates.

“The difference between the gyration of paper market oil prices versus what seems to be substantially higher physical prices sends conflicting signals to operators who cannot plan rigs and capital budgets when prices swing wildly based on tweets,” an oil boss said. “Our hypothesis is [that] the paper market is being manipulated. This will likely lead to an even worse supply and demand imbalance and higher prices in the medium term (next 12 months).”