Dallas Fed: rising costs due to tariffs could slow US energy production

Activity in the US oil and gas industry increased in the first quarter, but executives have grown more pessimistic due to the Trump administration’s tariffs and trade policies, according to a Federal Reserve Bank of Dallas survey. The poll included 130 firms from Texas, New Mexico, and Louisiana.

The steel and aluminum tariffs imposed on March 12 have already driven up drilling costs. Oil and gas companies reported a 4% increase in site development expenses, and some respondents warned that higher costs could curb energy production.

Indices tracking business pessimism and uncertainty have risen, the Dallas Fed noted. Executives highlighted contradictions in US policy — while the administration aims to bolster energy dominance, its trade measures risk pushing oil prices higher.

Firms project that by the end of 2025, WTI crude will average $68 per barrel, rising to $82 by 2030. Natural gas prices are expected to reach $3.78 per million British thermal units (MMBtu) by 2025 and $4.83 by 2030.