U.S. shale industry reluctant to boost oil production in response to Iran war 'chaos'

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U.S. shale executives say they do not expect to significantly increase production over the next two years as a result of the "chaos [https://www.ft.com/content/273c0321-0678-4ac0-9ccc-432301865b4c]" arising from the war in the Middle East.

According to the anonymous survey [https://www.dallasfed.org/research/surveys/des/2026/2601/2601update#tab-questions] of more than 100 oil and gas companies published this week in a quarterly report released by the Federal Reserve Bank of Dallas, 43% of executives said they do not expect daily production to increase by more than 250K bbl/day in 2026, and 32% of respondents said they expected production to rise more than 250K bbl/day but not more than 500K bbl/day in 2027.

The industry's reluctance to commit to production increases comes despite President Trump's "energy dominance" agenda, and as Secretary of Energy Chris Wright and Secretary of the Interior Doug Burgum recently held a call with oil and gas executives to encourage more production.

Yet despite the Trump administration's pressure, U.S. oil and gas rig counts have remained flat, apparently a sign of the sector's more disciplined approach after previous boom and bust cycles.

In comments published with the survey, one executive said: "With all of the chaos,predicting anything in the energy sector is very difficult."

"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," another respondent said.

"The long-term consequences of this war were not fully considered," an executive from an unnamed oilfield services firm said. "The disruption this will cause to energy markets and other macroeconomic measures will be significant. The unpredictable nature of the current administration makes business modeling near impossible."

The Strait of Hormuz remains mostly closed, trapping a fifth of the world's crude supplies, and ~80% of respondents to the survey expect traffic to normalize no earlier than August, while two-thirds said they expect 90% of trapped Persian Gulf production to return to market eventually.

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