Worried that high oil prices won't last, American shale giants are unwilling to expand production.

The US shale oil industry is keeping its distance from the Trump administration's calls for increased production. Despite Middle Eastern conflicts driving oil prices above $100 per barrel, industry giants generally choose to wait and are unwilling to easily expand capital expenditures.

According to the UK Financial Times on Friday, the latest quarterly survey by the Dallas Federal Reserve shows that among more than a hundred oil and gas company executives, 43% of respondents expect daily output in 2026 to increase by no more than 250,000 barrels. This result indicates that even with high oil prices, the shale industry still harbors deep doubts about whether high prices can be sustained.

Market analysts point out that the forward prices for 2027 and 2028 are still lower than the breakeven line required for producers to significantly ramp up production, which directly restricts corporate investment decisions.

The Trump administration has made it clear it is pressuring the industry. Energy Secretary Chris Wright and Interior Secretary Doug Burgum jointly called oil and gas executives last week, urging them to increase drilling in hopes of lowering gasoline prices before this year’s midterm elections. However, the number of oil and gas drilling rigs in the US has yet to see a significant increase, and the gap between the industry’s restrained stance and the government’s intentions is becoming increasingly prominent.

Executives Generally Wait and See, Expansion Willingness Remains Weak

The Dallas Fed survey was conducted anonymously and is regarded as an important indicator of sentiment in the US energy sector. This quarter's results show that in the face of “chaos” caused by the Iran war, shale oil executives are generally unwilling to quickly expand production.

Survey data shows that regarding output expectations for 2027, 32% of interviewed executives believe daily output increases will be in the range of 250,000 to 500,000 barrels. One anonymous executive commented: “In such chaotic conditions, predicting any trend in the energy industry is extremely difficult.” Another executive noted that the divergence between paper market prices and physical prices “sends conflicting signals to operators. When prices fluctuate wildly based on tweets, companies simply cannot plan drilling schedules and capital budgets.”

Dan Pickering, founder of financial services firm Pickering Energy Partners, said in an interview: “Most companies are taking a wait-and-see or standstill approach with their 2026 budgets.” He also pointed out, “Every day the conflict continues tightens the market supply for 2027 and 2028, but recent volatility makes it difficult to form any judgment about short-term trends.”

Government Pressure Has Limited Effect; Major Operators Respond Slowly

The Trump administration is aggressively promoting the “energy dominance” strategy, continuously urging the industry to boost production to reduce inflationary pressure and win voter support. Yet, the actual industry response differs markedly from policy expectations.

Oilfield services provider Halliburton released its first quarter results on Tuesday, with North American business revenue at $2.1 billion, down 4% year-on-year. CEO Jeff Miller said during the earnings call that some small producers have started to take action, trying to seize the opportunity presented by high oil prices, but overall, there are no signs of new drilling rigs. “We’re still in the early stages,” Miller said. “The ones acting first are small companies, while the timeline for major operators remains unclear.”

This pattern reflects a more cautious capital discipline formed after multiple cycles of boom and bust in the shale sector—compared to chasing short-term price signals, companies prefer to wait for the forward curve to provide clearer profit guarantees.

The Market Maintains Cautious Optimism About Restoration of the Strait of Hormuz

The survey also solicited executives’ opinions on the impact of Middle East dynamics on global energy supplies. Most respondents expect the Strait of Hormuz to return to normal traffic by August 2026. About two-thirds think that 90% of currently stranded output in the Persian Gulf will eventually return to the market.

However, this relatively optimistic outlook has not translated into immediate motivation for expansion. Analysts point out that although current spot oil prices have exceeded $100 per barrel, forward price curves show that price levels for 2027 and 2028 remain insufficient to support producers making large-scale expansion commitments. Under the dual pressures of unclear price signals and uncertainty in geopolitics, the cautious stance of shale giants is unlikely to change in the short term.

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