Dallas Fed Q3 2026 survey finds oil executives expect WTI to average $88 per barrel over the next six months
Oil and gas executives are bracing for lower crude prices ahead — even as spot prices hover near $99 a barrel. The Q3 2026 Dallas Fed Energy Survey, drawing responses from more than 100 firm executives, found a mean six-month WTI price expectation of $88 per barrel, with end-of-year forecasts averaging $88.38 per barrel. That gap between where prices are trading today and where industry insiders expect them to land raises a pointed question about what’s driving the disconnect.
Survey findings: WTI price expectations across time horizons
The numbers tell a clear story. Of the 106 executives who answered the time-horizon price question, the mean six-month WTI forecast came in at $88 per barrel. That drops to $82 at the one-year mark, dips to $79 at two years, then edges back up to $82 at five years — a trajectory of near-term softening followed by a modest long-term floor.
The end-of-year question drew even more responses. Among 125 executives, the average end-of-2026 WTI forecast was $88.38 per barrel, but the range was striking: the lowest forecast was $70 per barrel, the highest hit $126. That spread alone signals how much uncertainty is baked into the market right now.
With spot prices averaging just $59 per barrel, 128 executives forecast WTI would end 2026 at $62.41 per barrel — a number since revised upward by more than 40%.
One number stands out above the rest. The average daily WTI spot price during the Q3 survey period (September 16–24, 2026) was $98.70 per barrel — meaningfully above the consensus forecast, which means most executives expect prices to soften from where they were trading during the survey.
Zoom out, and the trajectory of end-of-year forecasts across all four quarterly surveys gets interesting. Back in Q4 2025 — the first time the Dallas Fed asked for an end-of-2026 prediction — 128 executives averaged just $62.41 per barrel. Each subsequent quarter pushed that number higher: $74.04 in Q1 2026, $80.55 in Q2, and now $88.38. The forecast has risen nearly $26 per barrel in less than a year.
Geopolitical uncertainty and Iran cited as primary price drivers
Ask executives what’s driving the volatility, and one answer keeps coming up: Iran. Multiple survey respondents pointed to the Iranian conflict as the dominant wild card shaping crude oil prices right now. One executive put it plainly — the conflict’s movement correlates directly with commodity prices.
The practical consequences are real. Price swings of $5, $10, and even $20 per barrel in either direction have become routine, one executive warned. That kind of unpredictability makes basic financial planning nearly impossible — choosing a planning price or budgeting price, as one respondent noted, is “very challenging.”
Not everyone is bearish, though. Some executives are actually bullish on oil prices precisely because of the Middle East situation. The reasoning: geopolitical disruption tends to tighten supply expectations, and the ramifications of what’s unfolded in the region are still working through markets. One executive described the current environment as leading to “bullish oil price sentiment.”
The broader mood is one of exhaustion mixed with cautious resilience. “We are living through wild times,” one executive wrote, “but it is not the first crisis energy companies have had to weather.”
Cash flow allocation differs between large and small E&P firms
One of the survey’s special questions asked E&P executives where they plan to direct increased free cash flow in coming quarters, following a period in which cash flow for many firms rose compared to the first three quarters of 2025. Seventy-six E&P executives responded — 62 from small firms, 14 from large ones.
The divide in priorities is sharp. Among large E&P firms — those producing 10,000 or more barrels per day — 50% said their top priority is returning capital to shareholders or owners, with capital expenditures coming second at 21%.
Small E&P firms tell a different story. Their top priority was capital expenditures, selected by 31% of respondents, followed by debt reduction at 23%. That gap reflects structural differences between the two groups: large firms have more flexibility to reward investors, while smaller operators are still focused on building capacity and managing leverage.
Worth noting: large E&P firms account for more than 80% of U.S. production, even though small firms are greater in number. Their capital allocation choices carry outsized weight for the broader industry.
Fuel price spreads and cost pressures weigh on producers and service firms
Higher crude prices don’t automatically translate into higher profits across the board. Several executives flagged a growing frustration — refiners, not producers, appear to be capturing most of the benefit from elevated crude and gasoline prices. As one E&P executive put it directly, “producers are not seeing all the benefits.”
On the fuel price spread question — how long before gasoline and diesel prices return to 2025 levels — executives were pessimistic. Nearly half (48%) expect diesel will take more than four quarters to normalize; for gasoline, 36% said the same. Neither category is expected to snap back quickly.
Cost pressures are compounding the problem. Material and labor costs continue to climb, and debt financing is getting more expensive, squeezing margins from multiple directions at once. Oilfield service companies face their own version of this bind — one service firm noted that while higher WTI prices help with pricing, roughly 75% of EBITDA still needs to be reinvested in equipment upgrades just to meet customer demands. Higher revenues don’t mean higher profits when reinvestment requirements are that steep.
How Q3 2026 forecasts compare to earlier quarters
Context matters when reading any single survey result, according to the Federal Reserve Bank of Dallas. In Q2 2026, 120 executives gave a mean six-month WTI forecast of $68 per barrel and an end-of-year forecast of $80.55 per barrel, with a survey-period spot price averaging $87.27 — below the current Q3 spot price of $98.70.
In Q1 2026, 116 executives forecast $78 per barrel at six months and $74.04 per barrel for year-end, against a spot price of $94.65 — closer to today’s levels, but the year-end forecast was $14 lower than the current Q3 figure.
Q4 2025 set the baseline. With spot prices averaging just $59 per barrel, 128 executives forecast WTI would end 2026 at $62.41 per barrel — a number since revised upward by more than 40%.
The Dallas Fed Energy Survey is a quarterly publication that polls oil and gas firm executives across the U.S. energy sector on business conditions and price expectations. The consistent upward revision of end-of-year forecasts — from $62.41 to $88.38 over four consecutive quarters — captures how dramatically the industry’s outlook has shifted as geopolitical pressures, supply dynamics, and cash flow realities have evolved throughout 2026.
Kelly is an experienced writer with 15 years of experience exploring the big stories that shape our world, from tech breakthroughs and space exploration to climate, energy, and the fascinating quirks of science. She has a talent for turning complex ideas into sharp, memorable insights that stay with readers long after they’ve finished reading.
