Dallas Fed Q3 2026 survey finds oil executives expect WTI to average $88 per barrel over the next six months
More than 100 oil and gas executives expect WTI crude oil prices to fall well below where they are now, according to the Q3 2026 Dallas Fed Energy Survey released this week. Executives from 106 firms put their six-month WTI forecast at a mean of $88 per barrel, while 125 firms pegged year-end 2026 prices at an average of $88.38 per barrel — both figures notably below the $98.70 average daily spot price recorded during the survey period.
Survey findings: WTI price forecasts across time horizons
The six-month and year-end numbers only tell part of the story. Those same 106 firms also shared their longer-range outlook: WTI averaging $82 per barrel at one year, dipping to $79 at two years, then edging back to $82 at five years. The pattern is clear — executives see today’s elevated prices as temporary, with a gradual slide before a modest recovery somewhere down the road.
The year-end 2026 question drew responses from 125 firms, landing at an average of $88.38 per barrel. But look at the spread underneath that average. The lowest individual forecast was $70 per barrel; the highest hit $126. That’s a $56 gap, and it tells you just how much disagreement exists among industry insiders about where prices land by December.
Every quarter, executives have revised their year-end outlook upward, tracking alongside rising geopolitical tensions and persistent supply uncertainty.
What makes all this especially notable is the distance from where WTI was actually trading. The average daily spot price during the Q3 survey period was $98.70 per barrel — meaning executives, collectively, expect prices to fall roughly $10 from where they stood when they filled out the survey.
Quarter-over-quarter shift in executive expectations
The Q3 numbers look very different from what executives were saying just a few months ago. When the Dallas Fed first asked the year-end 2026 price question in Q4 2025, executives from 128 firms averaged just $62.41 per barrel. The spot price back then was $59.00, so the industry was barely expecting prices to move at all.
By Q1 2026, that average jumped to $74.04 per barrel — even as the spot price during the survey period sat at $94.65, meaning executives were still forecasting a significant pullback. In Q2 2026, the year-end forecast rose again to $80.55, with spot prices averaging $87.27 during the survey window.
Now in Q3, the forecast average has climbed to $88.38 — the highest yet. Every quarter, executives have revised their year-end outlook upward, tracking alongside rising geopolitical tensions and persistent supply uncertainty. That steady climb suggests the industry is gradually repricing its baseline assumptions rather than treating elevated prices as a short-lived spike.
Geopolitical uncertainty and Iran cited as key price drivers
Ask executives what’s driving their uncertainty, and the answer comes back fast: Iran. Multiple respondents identified the Iranian conflict as the primary wildcard affecting oil price volatility. One executive put it bluntly, warning that “swings of $5, $10 and $20 up or down are common” and that picking a planning or budgeting price has become extremely difficult.
Another executive said pricing volatility is “near an all-time high given the backdrop of Iran.” That kind of language from industry veterans — people who’ve lived through multiple commodity cycles — signals the current environment feels genuinely unusual. Not just another rough patch.
Not everyone is purely pessimistic. One support services executive offered a more structured read on where prices are settling, arguing that the floor for WTI has shifted upward to the $65–$70 range and is likely to hold there for at least the next one to two years. That’s a meaningful shift from the $55 floor many assumed before Middle East tensions escalated, according to the Federal Reserve Bank of Dallas.
Cash flow allocation and fuel price spread questions
Beyond price forecasts, the Q3 survey asked how firms are handling the windfall from higher commodity prices. Of the 76 exploration and production executives who answered the cash flow allocation question, responses split sharply along firm size.
Large E&P firms — those producing 10,000 or more barrels per day — overwhelmingly favored returning cash to shareholders, with 50 percent of large-firm executives citing that as their top priority and capital expenditures second at 21 percent. Small firms flipped that order entirely: 31 percent prioritized capex, followed by debt reduction at 23 percent.
On fuel price spreads, executives were asked how long they expect diesel and gasoline prices to take before returning to 2025 levels. Nearly half — 48 percent — said diesel would take more than four quarters. Gasoline was seen as recovering faster, though 36 percent still expected it to take more than four quarters as well.
Some executives pushed back on the idea that producers are capturing all the upside. One E&P company noted that refiners, not producers, are “reaping the majority” of the benefits from higher crude and gasoline prices. Others flagged rising material costs, labor expenses, and debt financing as factors squeezing margins even while commodity prices stay elevated.
What the Q3 survey tells us
The Q3 2026 Dallas Fed Energy Survey paints a picture of an industry navigating unusually high uncertainty. Executives broadly expect WTI to pull back from current levels near $99, settling around $88 per barrel by year-end. Their year-end forecasts have risen every quarter since the question was first asked in Q4 2025 — climbing from $62.41 to $88.38, a shift of more than $26 per barrel in roughly 12 months.
Iran remains the dominant wildcard, with executives citing extreme price swings and near-impossible budgeting conditions. Large firms are channeling extra cash flow back to shareholders while smaller ones reinvest. Higher prices are boosting free cash flow for many, but rising costs and uneven margin distribution across the supply chain mean the benefits aren’t reaching everyone equally.
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.
