America’s oil and natural gas producers kept growing through the third quarter. According to the Sept 30 Dallas Fed Energy Survey, producers increased barrels and workers have been added amid the Iranian War’s impact on pricing.

For families paying more than $4 a gallon at the pump, the survey offers a straight answer on how things get better: the relief is coming from American wells. How quickly it arrives depends on whether Washington gives producers the certainty to keep investing.

The Dallas Fed polled 125 firms across Texas, northern Louisiana and southern New Mexico between Sept. 16 and 24. Its business activity index came in at 38.8, still well into expansion territory though down from a second-quarter reading of 46.1. Oil production index rose to 20.7 from 15.0, natural gas production climbed to 14.8 from 3.7, and the employment index more than tripled, to 15.2 from 4.7. That builds on a year in which the U.S. already produced more crude than any country in history.

Producers aren’t betting on a war premium

Oil traded at $98.70 a barrel during the survey window, yet respondents expect West Texas Intermediate (WTI), to finish the year at $88 and slide to $79 within two years.

It also answers the question critics ask every time prices spike, which is why producers don’t simply drill their way to cheaper fuel when oil is near $100. A well spud today takes months to come online and is expected to produce for years, so it has to pencil out at the price executives expect in 2028, not the number on this week’s screen.

Volatility makes that math harder. “Pricing volatility is near an all-time high,” an exploration and production executive wrote to the Dallas Fed. “Swings of $5, $10 and $20 up or down are common.” Nobody wants to commit a multimillion-dollar drilling program to a price that can move $20 before the rig shows up.

Costs are rising before the first foot is drilled

Higher oil prices haven’t translated into fatter margins. Supplier delivery times stretched further, with that index rising to 36.2 from 31.7.

One executive summed up the problem in their Dallas Fed survey comment: “The costs of services and permitting are increasing dramatically. These are predrill costs, so they dramatically affect the bottom line.”

Every month a project sits waiting on a federal permit is a month of carrying costs with no barrels to show for it, and that burden falls hardest on independent oil producers, the companies that drill 90% of American wells and have the least room to absorb a delay.

The risk producers are calling out is Washington

Iran isn’t the only thing on investors’ minds. “Regulatory uncertainty poses a material risk to business investment,” one producer wrote in a survey comment. “When administrations’ priorities shift sharply every 2-4 years, companies face a dilemma: Invest or avoid due to reversal risk.”

Congress appears to be listening. On Sept. 30, Sens. Shelley Moore Capito (R-W.Va.), Mike Lee (R-Utah), Martin Heinrich (D-N.M.) and Sheldon Whitehouse (D-R.I.) unveiled the Bipartisan American Affordability and Jobs Act of 2026. According to World Oil, the bill would modernize the National Environmental Policy Act (NEPA), cut duplicative reviews and litigation, and set clear timelines for project approvals.

The bipartisan part matters most. A permitting process written into law with votes from both parties is far harder to unwind than an executive order or agency guidance, which is exactly the reversal risk the survey describes. A rule that flips with every administration gives a producer a reason to wait, while a statute gives it a reason to drill.

So when does diesel and gas affordability get better?

The survey’s answer for households is that relief won’t come quickly. Gasoline is above $4 a gallon nationally, compared with about $3 a year ago, and diesel has topped $6, according to The EIA. On Sept. 29 the Energy Department announced another 40-million-barrel release from the Strategic Petroleum Reserve, which could take the emergency stockpile to its lowest level since 1982.

The executives closest to the market expect the squeeze to last. Nearly half of respondents (48%) said diesel spreads (the premium diesel sells for over crude) will take a year or more to return to 2025 levels. “Diesel is the mother’s milk of the economy,” one service firm said. “We are just starting to see the impact on the wider economy.” Diesel moves freight, runs farm equipment and powers the trucks that stock grocery shelves, so it shows up in household budgets long after the headlines move on.

The longer-term forecasts do point toward relief, with oil at $79 in two years and $82 in five. Those numbers assume American producers keep adding supply, though. The SPR is a bridge that’s getting shorter with every release, while the more lasting reserve is in the Permian, the Bakken and the Appalachian Basin. As we noted back in May, when global conflict hits, domestic energy delivers. Permitting reform is how Congress makes sure it can keep delivering.

Independents keep reinvesting

The survey also shows a sector that learned from past boom-and-bust cycles. Among producers, half of large firms said returning capital to shareholders is their top use of free cash flow, while 31% of small firms put capital spending first. Both are signs of discipline: the larger companies are rewarding the investors who stuck with them through the downturns, and smaller independents are putting money back into the ground.

Bottom Line

American producers are doing what the country needs from them: increasing output, hiring and planning with discipline in the middle of a global supply shock. What the Dallas Fed survey shows they lack is predictability, and they’ve said plainly that policy whiplash keeps capital on the sidelines. Congress now has a bipartisan bill that would put permitting timelines into law. The sooner it passes, the sooner the barrels that bring prices down can get to market, and the less the country has to lean on an emergency reserve that is already running low. That is the path to meeting what we call the “demand decade” with American energy.