The Texas Railroad Commission (RRC) recently reported that it issued 557 original drilling permits in May 2025, including 504 for new oil or gas wells, nine to re-enter plugged wellbores, one field transfer, 42 for re-completions, and one reclassification, according to Rigzone. These figures highlight Texas’s continued central role in domestic energy production at a time when global supply concerns are rising again.
However, the recent U.S. strikes on Iranian nuclear sites have injected fresh uncertainty into energy markets. Many investors expect heightened geopolitical risk to trigger a surge in oil prices, adding to inflationary pressures and complicating the outlook for interest rate cuts.
“I think the markets are going to be initially alarmed, and I think oil will open higher… The uncertainty is going to blanket the markets, as now Americans everywhere are going to be exposed. It’s going to raise uncertainty and volatility, particularly in oil,” said Mark Spindel, Chief Investment Officer at Potomac River Capital, as reported by USA Today.
Texas, as the largest oil-producing state, will be directly affected by any sustained oil price spike. Higher prices could boost revenues for Texas operators and drilling activity in the short term, but persistent global tensions and price shocks could also weigh on broader economic stability and fuel costs for households.
For context, crude oil prices have already climbed 18% since June 10, with Brent crude hitting a near five-month high of about $79 per barrel. Some analysts warn that if Iran retaliates by targeting Gulf oil infrastructure or disrupting shipping through the Strait of Hormuz, oil could easily push toward $100 per barrel, or even reach $130 in extreme scenarios, driving U.S. inflation close to 6% by the end of the year.
Despite oil’s rally, the S&P 500 has stayed mostly stable after an initial drop when Israel launched its strikes on June 13. History shows that while stocks often dip during Middle East conflicts, they tend to recover within weeks or months once markets adjust to the new risks.
Meanwhile, the U.S. dollar could see mixed effects. An escalation typically prompts a flight to safe assets, which might strengthen the dollar and push yields lower. However, persistent inflation worries could counteract that support.
In January, U.S. crude stocks rose by 958,000 barrels for the week ending January 17, while gasoline inventories increased by 3.23 million barrels and distillate stocks by 1.88 million barrels. Rising stockpiles can signal weaker demand or oversupply.
In short, while Texas stands to benefit from stronger oil prices through increased drilling and production activity fueled rather by a weaker demand or oversupply, prolonged geopolitical tensions risk unsettling broader markets, consumer confidence, and inflation expectations both in the U.S. and globally.
