The Federal Reserve Bank of Dallas’ quarterly survey of over 130 oil and gas producers based in Texas, Louisiana, and New Mexico, conducted in June, suggests the industry’s outlook is pessimistic. Nearly half of the 38 firms that responded to this question saw their firms drilling fewer wells this year than they had earlier expected.

Survey participants could also submit comments. One executive from an exploration and production (E&P) company said, “It’s hard to imagine how much worse policies and DC rhetoric could have been for US E&P companies.” Another executive said, “The Liberation Day chaos and tariff antics have harmed the domestic energy industry. ‘Drill, baby, drill’ will not happen with this level of volatility.”

Roughly one in three survey respondents chalked up the expectations for fewer wells to higher tariffs on steel imports. And three in four said tariffs raised the cost of drilling and completing new wells.

“They’re getting more places to drill and they’re getting some lower royalties, but they’re also getting these tariffs that they don’t want,” Rapier said. “And the bottom line is their profits are going to suffer.”

Earlier this month, ExxonMobil