U.S. oil producers aren't coming to the rescue despite high prices as mistrust and chaos hit outlook

Key Points:

• A Dallas Fed survey of Permian Basin oil and gas executives indicates limited expected increases in U.S. oil production this year and in 2027 despite the Iran war, with most forecasting under 500,000 barrels per day of additional output.
• The reluctance to boost production persists despite West Texas Intermediate crude prices rising sharply from $57 to around $100-$111 per barrel, as executives cite extreme price volatility and political uncertainty dampening capital spending.
• Executives criticized the unpredictable impact of President Trump's social media on oil prices and the disconnect between paper market prices and physical supply, warning this could worsen supply-demand imbalances and lead to higher medium-term prices.
• The closure of the Strait of Hormuz and disruption of Middle East oil shipments have led to inventory shortages in Asia and Europe, with experts warning that oil supply disruptions will worsen in the coming months even if the strait reopens soon.
• Analysts predict OECD commercial oil inventories will reach critical lows by late May, triggering exponential price increases, and that it will take several months after the war ends for oil production and supply chains to return to near full capacity.