Oil and gas executives across America’s energy heartland are pulling back on investment plans at an alarming rate. Invest with ! The Dallas Fed Energy Survey reveals that more than a third of exploration and production leaders have significantly delayed capital decisions, citing persistent uncertainty about oil prices and escalating production costs. Oil prices projected for 2025 are a major consideration, as executives closely monitor these forecasts to guide their strategic planning and investment decisions amid ongoing market volatility. Texas, Louisiana, and New Mexico witnessed declining activity through the third quarter of 2025, with the business activity index climbing modestly from -8.1 to -6.5—yet remaining firmly in contraction territory.

Exploration and production firms face particularly challenging conditions. Approximately 43% of E&P companies anticipate reduced capital expenditure compared to the same period last year, while the company outlook index plummeted from -6.4 in the second quarter to -17.6, signaling deepening pessimism throughout the sector. The situation has grown more complex as 78% of exploration and development executives report postponing investment decisions specifically due to oil price volatility and rising operational expenses. Crude oil markets have struggled consistently this year, declining nearly 9% year-to-date while failing to sustain prices above $70 since June.

This widespread caution reflects fundamental shifts in industry economics. Companies that once embraced aggressive growth strategies now prioritize capital preservation and financial flexibility over expansion. However, some firms are still targeting robust financial performance by adopting a profitable growth strategy and focusing on strategic capital allocation. The confluence of market uncertainty, cost pressures, and operational challenges has created an environment where even seasoned industry veterans are reassessing their approach to capital allocation and long-term planning. Despite the challenges, a cautiously optimistic investment environment persists among select industry leaders.

Global Energy Landscape

The global energy landscape is in the midst of a profound transformation, with the oil and gas industry at the center of this evolution. Oil and gas serve as a critical energy source for both power generation and transportation, originating from geological processes that have formed these fossil fuels over millions of years and underscoring their significance in the global energy mix. As the world grapples with the dual challenges of meeting rising energy demand and advancing the energy transition, the gas industry and oil and gas sector are adapting their strategies to remain competitive. This shift is driven by a complex mix of international supply and demand dynamics, evolving production strategies, and the growing imperative for environmental sustainability. Oil and gas companies are not only responding to market pressures but are also playing a pivotal role in shaping the future of energy by investing in innovative technologies and comprehensive energy solutions that support a lower-carbon future.

Shifting international supply and demand dynamics

Global demand for crude oil and natural gas continues to be shaped by a variety of factors, including robust economic growth in emerging economies and evolving energy policies in developed nations. Countries like China and India are fueling increased consumption of energy sources, while many Western economies are accelerating their transition toward renewables and seeking to reduce their reliance on fossil fuels. In response, the oil and gas sector is investing heavily in low carbon technologies and developing comprehensive energy solutions that address both current and future energy needs. Oil and gas companies are exploring new frontiers in green and blue hydrogen production, aiming to lower carbon emissions and diversify their energy portfolios. These efforts are complemented by a focus on operational efficiency and the integration of advanced technologies, positioning the gas sector and oil and gas industry to meet global demand while supporting the shift toward more sustainable energy sources.

OPEC+ production strategies and their impact on U.S. markets

OPEC+ remains a powerful force in the global oil market, with its production strategies directly influencing crude oil prices and, by extension, the health of the U.S. oil and gas industry. Decisions made by the Organization of the Petroleum Exporting Countries and its allies regarding crude oil production capacity can cause significant fluctuations in the price of West Texas Intermediate (WTI) and impact the profitability of oil and gas operations across the United States. U.S. oil and gas companies, particularly those in the shale sector, are highly sensitive to these price movements, which can dictate drilling activity, production rates, and capital allocation. To navigate this volatile environment, the industry is prioritizing cost reduction measures, such as implementing enhanced oil recovery techniques and optimizing operational costs. By focusing on efficiency and maintaining capital discipline, gas companies and oil and gas operators are working to ensure their resilience in the face of shifting global supply dynamics and the ongoing influence of petroleum exporting countries.

Geopolitical tensions influencing global oil prices

Geopolitical tensions, especially in key oil-producing regions like the Middle East, continue to inject uncertainty into global oil prices and the broader oil and gas market. Conflicts, sanctions, and abrupt changes in government policies can disrupt the supply of crude oil, leading to price volatility that reverberates throughout the global economy. The oil and gas industry closely monitors these developments, as they can have immediate and long-term impacts on investment strategies, production planning, and overall profitability. In response, oil and gas companies are diversifying their portfolios by investing in renewable energy projects and forging strategic partnerships to build more resilient and sustainable operations. The sector is also embracing the energy transition by integrating low carbon technologies and supporting the growth of renewable energy sectors. National oil companies, international energy agencies, and governments are collaborating to develop comprehensive energy solutions that address both energy security and environmental concerns. As the global energy landscape continues to evolve, the oil and gas sector’s ability to adapt, innovate, and prioritize sustainability will be critical to maintaining its relevance and leadership in a rapidly changing world.

Energy Transition and Its Impact

The energy transition represents a fundamental shift in how the world produces, distributes, and consumes energy, with the oil and gas industry at the heart of this transformation. As global efforts intensify to reduce greenhouse gas emissions and combat climate change, the gas industry and oil and gas sector are facing mounting pressure to adapt their business models and operations. This transition is not only about environmental responsibility but also about maintaining competitiveness in a rapidly evolving energy landscape.

Shifts toward renewables and implications for oil and gas demand

The accelerating adoption of renewable energy sources—such as solar, wind, and hydroelectric power—is reshaping global energy demand. According to the International Energy Agency, renewables are projected to account for 60% of the world’s power generation by 2050, significantly reducing reliance on fossil fuels like crude oil and natural gas. This trend presents both challenges and opportunities for oil and gas companies. As demand for traditional energy sources declines, the oil and gas sector must innovate to remain relevant. Many gas companies and oil and gas operators are investing in low carbon technologies, including carbon capture and storage, to reduce their environmental impact and diversify their energy portfolios. The gas sector is also exploring new energy sources, such as green and blue hydrogen, to offset the decline in demand for fossil fuels. By integrating these advanced solutions, oil and gas companies can position themselves as key players in the transition to a more sustainable energy future.

Executive perspectives on decarbonization and regulatory pressures

Executives across the oil and gas industry recognize the urgent need to decarbonize operations in response to growing regulatory and societal pressures. International agreements like the Paris Agreement and policy frameworks such as the European Union’s Green Deal are compelling companies to set ambitious emissions reduction targets and accelerate the adoption of renewable energy projects. Leading oil and gas companies are investing in a range of initiatives, from large-scale wind and solar farms to electric vehicle charging networks, as part of their broader decarbonization strategies. While progress is being made, many executives acknowledge that the pace of change must increase to meet global climate goals. The oil and gas industry is also collaborating with governments and technology partners to develop innovative solutions that support the energy transition. As regulatory requirements become more stringent, companies that proactively embrace sustainability and invest in renewable energy projects will be better positioned to thrive in the evolving energy landscape.

Executives Warn of Declining Oil and Gas Activity

What happens when an industry that powers the American economy begins to contract? Recent data from the third quarter of 2025 provides a sobering answer. The oil and gas sector experienced an accelerated decline that extends troubling trends from earlier in the year, with executives voicing unprecedented concern about operational realities and future viability. The energy industry’s cyclicality is a significant factor contributing to the current downturn and the heightened caution among executives. The energy industry’s cyclicality leads to recurring periods of boom and bust, influencing investment strategies and prompting companies to seek diversification.

Dallas Fed survey shows negative business activity index

The Dallas Fed Energy Survey presents a stark portrait of industry conditions. While the business activity index improved marginally from -8.1 in the second quarter to -6.5 in the third quarter, negative readings signal continued contraction. This represents a dramatic reversal from the positive 3.8 reading recorded in the first quarter of 2025.

Market volatility has reached levels that challenge even experienced operators’ planning capabilities. “Commodity pricing seems impossible to predict with daily market swings over 5 percent up or down being normal for both natural gas and crude oil,” observed one executive in the survey comments. The outlook uncertainty index remained stubbornly high at 44.6, declining only slightly from 47.1 in the previous quarter, reflecting the persistent unpredictability plaguing decision-makers.

Looking ahead, oil prices are projected to remain range bound amid ongoing market volatility and economic uncertainty.

Sentiment worsens across E&P and sProduction indices for oil and gas remain in decline

Production metrics tell an equally concerning story. The oil production index held steady at -8.6, while the natural gas production index remained at -3.2. These figures extend the production declines that began in the second quarter, when oil production plummeted from 5.6 to -8.9 and natural gas dropped from 4.8 to -4.5. Recent trends in natural gas output show continued operational challenges, particularly in regions like the Permian Basin, where infrastructure constraints and market dynamics are impacting supply levels.

The International Energy Agency warns that global oil and gas field output declines are accelerating at an unprecedented pace. Without sustained investment, the world faces the equivalent loss of Brazil and Norway’s combined oil production annually. Perhaps most striking, the IEA emphasizes that “only a small portion of upstream oil and gas investment is used to meet increases in demand while nearly 90% of upstream investment annually is dedicated to offsetting losses of supply at existing fields”.

To address these challenges, some shale operators are exploring tier 2 and tier 3 acreage—areas that are more gas-heavy—to offset flattening production from mature tier 1 fields. This strategy aims to maintain overall production levels and unlock capital despite ongoing market and infrastructure hurdles.

Sentiment worsens across E&P and service firms

The company outlook index collapsed from -6.4 to -17.6 in the third quarter, revealing deepening pessimism across the sector. Both exploration and production firms and oilfield service companies reported deteriorating conditions, though service companies bore the brunt of the downturn.

Oilfield services firms encountered particularly harsh realities:

• Equipment utilization index dropped from -4.6 to -13.0
• Operating margins remained deeply negative at -31.8
• Prices received for services declined from -17.7 to -26.1

Despite these challenges, tech powered oilfield services are emerging as companies adopt digital technologies and innovative solutions—such as electrification, carbon capture, and hydrogen generation—to enhance efficiency and support energy transition initiatives.

Exploration and production companies faced their own cost challenges. Finding and development costs surged from 11.4 to 22.0, while lease operating expenses climbed from 28.1 to 36.9. One oilfield executive captured the industry’s predicament: “A vibrant oilfield services sector is critical if and when the U.S. needs to ramp up production. Right now we are bleeding”.

Employment data reinforces these operational challenges. Though the aggregate employment index improved from -6.6 to -1.5, it remained negative, while the employee hours index stayed at -3.7. These indicators point to continued workforce reductions and cautious hiring practices throughout the industry.

Capital expenditure plans reflect this cautious environment. Approximately 43% of E&P firms anticipate decreased spending compared to the same quarter last year. Another executive summarized the prevailing sentiment: “The downward pressure on oil prices coupled with continued tightness in finding qualified labor in remote locations continues to pressure profitability and dividends”. In response to these pressures, many firms are working to maintain capital discipline by implementing cost-reduction strategies, restructuring operations, and optimizing resource allocation to ensure financial stability.

Firms Delay Investments Amid Price and Policy Uncertainty

The oil and gas sector faces a capital allocation crisis unlike any seen in recent years. What happens when an industry built on long-term investments confronts unprecedented short-term volatility? The answer emerges clearly through executive decision-making patterns that reveal deep structural concerns about market stability and operational economics. Evolving energy policy and energy regulations are further contributing to executive uncertainty, as shifting government priorities and regulatory frameworks reshape the investment landscape.

Additionally, the roles of the federal energy regulatory commission and the environmental protection agency are increasingly significant in shaping the regulatory landscape for oil and gas investments, with both agencies enforcing standards and compliance that impact operational and capital decisions. Policymakers are also considering measures to expedite environmental approvals to boost energy production while balancing environmental concerns.

78% of executives report delayed investment decisions

Investment hesitation has reached epidemic proportions throughout the oil and gas industry. The Dallas Fed survey shows that 78% of exploration and production executives have delayed capital commitments due to current market uncertainties. The breakdown tells a compelling story: 36% report “significantly delayed” decisions while 42% indicate “slightly delayed” investments. Only 22% of executives maintain unchanged investment timelines.

This pattern carries serious implications beyond individual company operations. Industry analysts project 2025 will mark the first year-on-year decline in global upstream development spending since 2020. Should oil prices drift toward $50 per barrel territory, approximately 1.2 million barrels per day of production capacity could face elimination by 2026.

Some firms are leveraging digital tools to improve decision-making and operational efficiency during periods of investment hesitation.

Small vs large E&P firms show different delay patterns

Company size creates distinct investment behavior patterns. Small exploration firms producing fewer than 10,000 barrels daily show greater willingness to proceed with projects compared to their larger counterparts. Specifically, 24% of small E&P executives report no investment delays versus just 12% of large firm executives.

This difference reflects contrasting financial positions rather than different risk tolerance levels. One executive explained the challenge: “The low price for natural gas is crushing current cash flow. For smaller independents, cash flow is what feeds future investment”. Large companies demonstrate more cautious capital deployment strategies, with significantly more executives expecting decreased spending compared to those planning increases.

The volatile environment has created what one industry leader described as “decision paralysis” among certain operators. Oil prices sustained below $60 per barrel for extended periods would likely trigger more dramatic budget adjustments across the entire sector.

Uncertainty around oil prices and production costs cited

Two critical factors drive executive reluctance: volatile oil pricing and escalating production expenses. These concerns have intensified as crude markets remain trapped below $70 per barrel since June.

As a result, companies are closely monitoring energy costs and actively seeking strategies for lowering energy costs to remain competitive in the current market environment.

Academic research validates these conservative responses. A comprehensive study of 4,017 energy companies over 26 years confirms that both oil price uncertainty and economic policy uncertainty substantially reduce corporate investment levels. Oil-producing nations experience these effects more acutely than consuming countries. The underlying economic principle holds that when investments cannot easily be reversed, uncertainty increases the value of delaying capital commitments.

Current market conditions exemplify this theory perfectly. At $65 per barrel, companies maintain viable operations without triggering emergency budget cuts. However, they increasingly favor financial flexibility and shareholder returns over growth capital expenditure.

Small vs large E&P firms show different delay patterns

Company size creates distinct investment behavior patterns. Small exploration firms producing fewer than 10,000 barrels daily show greater willingness to proceed with projects compared to their larger counterparts. Specifically, 24% of small E&P executives report no investment delays versus just 12% of large firm executives.

This difference reflects contrasting financial positions rather than different risk tolerance levels. One executive explained the challenge: “The low price for natural gas is crushing current cash flow. For smaller independents, cash flow is what feeds future investment”. Large companies demonstrate more cautious capital deployment strategies, with significantly more executives expecting decreased spending compared to those planning increases.

The volatile environment has created what one industry leader described as “decision paralysis” among certain operators. Oil prices sustained below $60 per barrel for extended periods would likely trigger more dramatic budget adjustments across the entire sector.

Some companies are also forming partnerships with technology firms to enhance their operational resilience and adapt to market volatility.

Rising Costs Squeeze Margins Across the Sector

Cost pressures have reached a critical juncture for oil and gas operators throughout the region. Dallas Fed data reveals an escalating expense environment that continues to erode profit margins, adding substantial strain beyond the price volatility already challenging the industry.

To address these challenges, some operators are adopting smart fuel management systems, which help optimize costs and improve supply chain efficiency.

Input costs and lease operating expenses increase

Oilfield services firms face mounting expense pressures, with the input cost index surging from 23.9 to 30.9. Exploration and production companies confront similar challenges as their lease operating expenses index climbed dramatically from 25.6 to 38.7, reflecting accelerating day-to-day operational costs across the sector.

These cost increases represent more than temporary market fluctuations. Following a decade of relative price stability through 2020, supply chain expenses have risen at a compound annual growth rate of 5% over the past five years. Recent U.S. steel tariffs have driven oil country tubular goods costs up 25%–35%, with these materials representing 15%–25% of total drilling expenses.

Maintaining a consistent feedstock supply is crucial to mitigate the impact of rising input costs and ensure stable operations across the supply chain.

Operating margins for service firms remain negative

The margin squeeze has become particularly severe for service companies. Operating margins deteriorated further, with the index falling from -17.8 to -21.5, while oilfield services firms saw their margin index plunge to -33.4—a level that signals acute financial distress across the service sector.

Supply chain disruptions compound these challenges. Nearly half of operators (47%) report “significantly negative” impacts from supply-chain issues, while another 47% cite “slightly negative” effects. Most executives expect prolonged recovery periods, with 66% anticipating it will take more than a year to resolve current supply-chain challenges.

Disruptions in biofuel supply chains are also contributing to operational challenges for some firms.

Finding and development costs surge for E&P firms

Exploration and production companies encounter their own cost escalation problems. The finding and development costs index increased from 11.5 to 17.1, indicating higher expenses for discovering and developing new reserves. These F&D costs have doubled in 2023-24 from the $6.00/boe range prevalent during 2016-21.

Production economics face additional headwinds as field maturity increases. The share of mature and marginal oil fields will grow from 20% to over 40% by 2050, driving production costs higher. Mature, late-life assets can cost up to $15.00 per barrel more to operate than younger assets, creating ongoing expense pressure for operators.

At $60 oil prices, these cost realities become particularly challenging. Some 61% of executives forecast production would decline slightly at that price point, demonstrating how narrow profit margins have become across the current operating environment.

Environmental Challenges and Sustainability

The oil and gas industry faces mounting environmental challenges, from climate change and air pollution to water management and habitat preservation. As public scrutiny intensifies and regulatory expectations rise, the industry must prioritize sustainability to maintain its social license to operate and ensure long-term viability.

Emissions reduction targets and reporting requirements

In response to these challenges, oil and gas companies are setting clear emissions reduction targets and enhancing transparency through robust reporting practices. Frameworks like the Task Force on Climate-related Financial Disclosures (TCFD) are guiding companies in disclosing climate-related risks and opportunities, helping stakeholders assess their progress toward sustainability goals. Many oil and gas companies are investing in advanced technologies such as carbon capture and storage, as well as renewable energy sources like wind and solar, to reduce their carbon footprint. For example, industry leaders are deploying smart fuel management systems to optimize energy use and minimize waste, while also exploring the potential of green and blue hydrogen as part of their comprehensive energy solutions.

The drive for sustainability is prompting the oil and gas sector—including gas companies and oilfield service providers—to collaborate on developing innovative, low carbon technologies and cost reduction measures. By investing in renewable energy projects and integrating smart operational practices, the industry can balance economic growth with environmental stewardship. This commitment to sustainability not only helps reduce carbon emissions but also strengthens the industry’s position in a competitive, low-carbon economy. Ultimately, the oil and gas industry’s ability to develop comprehensive energy solutions that address environmental, social, and economic priorities will determine its continued relevance and success in the decades ahead.

Executives Shift Focus to International Shale Opportunities

The mounting economic pressures at home have sparked a strategic pivot among American oil producers. International shale development now represents a compelling alternative for companies seeking more favorable economics than domestic operations can currently provide.

Rising global energy demand and evolving global energy policies are driving this shift, as companies look to align their strategies with worldwide trends and regulatory environments.

Partnerships with energy technology companies are becoming increasingly important for firms expanding internationally.

77% expect international shale to become viable

More than three-quarters of executives surveyed by the Dallas Fed anticipate that shale oil drilling will become commercially viable in international locations outside the United States, Canada, and Argentina within the next decade. This expectation signals a fundamental recalibration of industry strategy as companies seek reserves that can generate sustainable returns at current price levels. The shift represents more than geographic expansion—it reflects recognition that traditional U.S. shale economics may no longer support the growth rates investors have come to expect.

In parallel, several countries are targeting the production of significant volumes of blue hydrogen annually and are investing in hydrogen generation and new low carbon technologies as integral parts of their international energy strategies.

Examples include Turkey, UAE, and Bahrain ventures

Several prominent ventures demonstrate this international momentum. Turkish national oil company TPAO partnered with Continental Resources in March to develop shale fields in Turkey’s Diyarbakir Basin, targeting what estimates suggest could be a 6.1 billion barrel reserve. Houston-based EOG Resources has moved aggressively into both the United Arab Emirates and Bahrain, successfully drilling horizontal wells that have already produced oil to the surface in UAE shale plays. EOG’s Bahrain operations encompass both gas exploration and expanded refinery capabilities. The refining and marketing sector plays a crucial role in these international ventures, as seen in Marathon Petroleum Corporation’s partnerships, with jet fuel production emerging as a key output to meet the region’s aviation industry demand and regulatory standards.

These international projects offer attractive economics compared to mature U.S. shale plays. Companies can often secure more favorable fiscal terms while accessing reserves that require lower breakeven prices than their domestic counterparts.

Domestic $60 oil no longer sustainable for many

The economics driving this international focus are stark. “We have begun the twilight of shale,” noted one executive, adding “the U.S. isn’t running out of oil, but she sure is running out of USD 60.00 per barrel oil”. Industry analysis indicates that U.S. crude needs to stay above $65 per barrel to maintain viable shale production.

This economic reality forces companies to seek opportunities where lower-cost operations can generate acceptable returns even if oil prices remain subdued. International shale development increasingly represents not just an opportunity for growth, but a necessity for long-term survival in a lower-price environment.

Price Forecasts Reflect Modest Optimism for 2025

Despite persistent headwinds, energy market forecasts offer cautious hope for price recovery. Industry analysts and Dallas Fed survey participants provide price projections that could influence investment decisions across the sector.

Natural gas intelligence platforms are providing valuable insights into market trends and price forecasts for 2025.

WTI expected to average $63 by year-end 2025

West Texas Intermediate crude prices are projected to stabilize around $64.65 per barrel for 2025, according to a Reuters poll of 31 analysts. The Energy Information Administration takes a more conservative approach, forecasting WTI spot prices will decline to approximately $59.00 per barrel in the fourth quarter, with further weakness expected around $50.00 per barrel in early 2026. J.P. Morgan analysts project WTI crude will average $63.00 per barrel through 2025, while BMI expects front-month WTI prices to average $65.00 per barrel this year.

These forecasts suggest the market expects prices to remain within the challenging $60-65 range that has prompted widespread investment delays among exploration and production companies.

Natural gas forecasted at $3.30 per MMBtu

Henry Hub natural gas prices are anticipated to reach $3.30 per MMBtu by year-end 2025, according to Dallas Fed survey participants. Standard Chartered’s projection aligns closely at $3.20 per MMBtu for the final quarter. The EIA expects natural gas spot prices to climb from $2.91 per MMBtu in August to $3.70 per MMBtu in the fourth quarter.

Long-term expectations show gradual price recovery

Market participants maintain measured optimism about longer-term price trajectories. Executives anticipate WTI prices of $72.00 per barrel two years from now, eventually reaching $77.00 per barrel five years from now. Natural gas projections follow a similar upward path, with prices expected at $4.12 per MMBtu in two years and $4.50 per MMBtu in five years.

These longer-term projections suggest industry confidence in eventual market stabilization, though the timeline for meaningful price recovery extends well beyond the immediate investment horizon that concerns most exploration and production companies today.

America’s oil and gas industry stands at a crossroads that will define its trajectory for the next decade. The Dallas Fed survey data reveals an industry grappling with fundamental economic shifts—where 78% of executives postponing investment decisions represents more than temporary market hesitation. These delays signal a recalibration of business models that have driven domestic energy production for the past decade.

Market dynamics have shifted beyond typical cyclical patterns. Exploration and production companies face a perfect storm of rising operational costs, squeezed margins, and persistent price volatility that challenges traditional investment approaches. Oilfield service firms bear the brunt of this transition, with equipment utilization rates reflecting the broader industry contraction that extends far beyond quarterly fluctuations.

The industry’s response reveals both pragmatism and adaptability. Executive interest in international shale development indicates strategic thinking about long-term sustainability rather than panic-driven decisions. WTI crude projected to recover to $77 per barrel over five years provides a foundation for patient capital allocation, though current sub-$70 prices demand immediate operational adjustments.

What emerges is an industry in transition rather than decline. Production companies are learning to operate effectively in a lower-price environment while maintaining the technological capabilities that revolutionized American energy independence. Supply chain challenges and workforce constraints present near-term hurdles, yet they also create opportunities for companies that can adapt their operational strategies.

The coming years will separate industry leaders from followers. Companies with strong balance sheets, efficient operations, and strategic vision will emerge stronger from this period of uncertainty. Those clinging to outdated business models may find themselves increasingly marginalized in a sector where $60 oil is no longer guaranteed to generate adequate returns.

This industry transformation ultimately reflects broader economic realities. Energy markets are maturing, and the easy gains from the shale revolution are giving way to more disciplined approaches to capital allocation and operational efficiency. The sector’s ability to adapt will determine not only individual company success but America’s continued energy leadership in an increasingly competitive global market.

FAQ

What are the main factors causing oil executives to delay investments?

Oil executives are delaying investments primarily due to uncertainty surrounding oil prices and rising production costs. About 78% of exploration and production executives reported postponing investment decisions in response to current market conditions.

How are rising costs affecting the oil and gas industry?

Rising costs are squeezing margins across the sector. Input costs and lease operating expenses have increased significantly, while operating margins for service firms remain negative. Finding and development costs for exploration and production companies have also surged, putting additional pressure on profitability.

What is the outlook for international shale opportunities?

There’s growing interest in international shale opportunities, with 77% of executives expecting shale oil drilling to become commercially viable in international locations outside the US, Canada, and Argentina within the next decade. Examples of ventures in Turkey, UAE, and Bahrain highlight this shift in focus.

What are the price forecasts for oil and natural gas in the coming years?

Analysts expect West Texas Intermediate (WTI) crude to average around $63 per barrel by year-end 2025, with long-term projections reaching $77 per barrel in five years. For natural gas, prices are forecasted at $3.30 per MMBtu by the end of 2025, with expectations of $4.50 per MMBtu in five years.

How is the current situation affecting employment in the oil and gas sector?

Employment indicators reflect the sector’s struggles. While the aggregate employment index has improved slightly, it remains negative, suggesting ongoing workforce reductions. The employee hours index also remains negative, indicating limited hiring across the industry.