The Federal Reserve Bank of Dallas has released its Q3 2025 Energy Survey, and the message from the field is clear: U.S. shale executives are losing confidence. Conducted September 10–18 across Texas, northern Louisiana, and southern New Mexico — a region that accounts for more energy output than many OPEC members — the survey captures the growing frustration of an industry once hailed as America’s “energy engine.”
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Pessimism Rising
Executives across exploration, production, and services reported deepening unease. Many point directly at the Trump administration’s trade and regulatory agenda, citing steel tariffs and abrupt energy policy shifts as “kneecapping” the shale business.
One operator summed up the mood bluntly:
“The U.S. shale business is broken. What was once the world’s most dynamic energy engine has been gutted by political hostility and economic ignorance.”
Another added:
“We have begun the twilight of shale. The U.S. isn’t running out of oil, but she sure is running out of $60 per barrel oil.”
Pressure on Oilfield Services
The survey also highlighted the fragile state of the oilfield services sector. Support firms — vital to drilling, completions, and future ramp-ups — report mounting financial strain.
A services executive warned:
“A vibrant oilfield services sector is critical if and when the U.S. needs to ramp up production. Right now we are bleeding.”
This signals a structural challenge: if service providers continue to consolidate or shutter, even a rebound in demand may struggle to translate into higher output.
Price Outlook: The $60s Through 2027
Perhaps the most telling shift came in price expectations.
- Q2 forecast: WTI at ~$68/bbl to end 2025, climbing into the $70s by 2027.
- Q3 forecast: Now revised down to ~$63/bbl by year-end, with expectations for the $60s to persist through 2027.
This recalibration underscores a sobering consensus: U.S. producers no longer expect higher prices to come to the rescue in the near term.
Global Context: Geopolitical Risk Premiums
Ironically, even as U.S. shale sentiment darkens, global supply risks are lending support to crude prices in the short run:
- Russia: Ukraine’s drone strikes on oil infrastructure and a partial Russian ban on diesel exports have tightened markets. Moscow has also extended its ban on gasoline exports.
- NATO: Warnings over Russian airspace violations raise the prospect of additional sanctions on Russian energy.
- U.S. Policy: The Trump administration is pressing allies, including India and Turkey, to curb Russian imports.
- Middle East: Iraq’s Kurdistan region is set to resume crude exports this weekend, reintroducing barrels into global flows.
These factors have nudged futures higher, though executives remain skeptical that such spikes can offset structural headwinds at home.
The Takeaway
The Dallas Fed survey paints a picture of an industry at a crossroads. U.S. shale remains resource-rich, but sentiment is bruised by politics, cost pressures, and a fragile services ecosystem. While geopolitical volatility props up prices in the near term, executives see a future where the “$60 barrel” defines the baseline reality.
For oilfield service providers, producers, and investors, the key question is whether this marks a temporary dip in confidence — or the true beginning of shale’s twilight.
