Texas oil and gas industry reporting job losses

Audio By Carbonatix

(The Center Square) – The Texas oil and natural gas industry reported job losses in January prior to a Federal Reserve Bank of Dallas report pointing to uncertainty in the industry because of geopolitical conflicts. 

Despite President Donald Trump pledging during his campaign that the U.S. would increase domestic production and “drill baby drill,” that has not materialized in Texas. In March, there were 49 fewer rig counts in the U.S., according to Baker Hughes. That number has fluctuated and remained above negative 40.

Lower rig counts mean less extraction jobs and less investment in drilling new wells. Many exploration and production (E&P) firms have said they are going to “wait and see” on new drilling due to increased costs and instability in the market the conflict has created, according to the Dallas Fed, The Center Square reported.

That is reflected in job losses reported in January. Overall, Texas added jobs but also reported losses and high unemployment rates in January, The Center Square reported. 

Based on an analysis of the latest employment data by the Texas Independent Producers and Royalty Owners Association (TIPRO), Texas upstream sector jobs decreased over the month in January by 600 for a total of 64,300. Support activities jobs remained flat totaling 128,600.

“The escalation of tensions with Iran into broader conflict in early 2026 has introduced significant global energy market vulnerabilities,” TIPRO said. “Early January geopolitical risks contributed to modest price premiums, but subsequent military actions and disruptions, particularly the near-complete closure of the Strait of Hormuz, which handles roughly one-fifth of global oil and LNG flows, triggered the largest supply shock in modern history. 

“As a result, Brent and WTI prices surged dramatically, exceeding $100 to $120 per barrel by March 2026. For Texas operators, the higher price environment alleviates margin compression, improves cash flows, and could catalyze renewed investment in drilling, completions, and midstream infrastructure. This in turn supports workforce stability and potential job growth in upstream and related sectors, reinforcing Texas's role as a reliable domestic supplier capable of quickly responding to global signals. However, the volatility also highlights risks of prolonged uncertainty, reinforcing the need for disciplined capital allocation.”

By mid-March, oil futures hit $120 a barrel on the West Texas Index. On Thursday, oil futures surpassed $112 a barrel, The Center Square reported.

“Even if the conflict were to end tomorrow and the Strait of Hormuz were to reopen, oil prices would not return to pre-conflict levels of $67 per barrel,” Andrew Lipow, with Houston-based Lipow Oil Associates, said. “The damage to energy infrastructure is done and will take months, if not years, to repair the more extensively damaged facilities. The damage to Ras Laffan in Qatar will reduce LNG supplies while damage to area refineries will reduce gasoline and diesel availability.”

Impacts on the Texas industry include higher oil prices that provide short-term benefit for producers and royalty owners and increased costs at major refineries, TIPRO president Ed Longanecker told The Center Square. This leads to higher costs for consumers, “which is simply a factor of market dynamics that we have no control over,” he said.

Despite this, industry workforce data “continues to indicate strong job postings for the Texas oil and natural gas industry in January following a decline in Q4 2025,” TIPRO notes. According to its analysis, there were 8,644 unique industry job postings in Texas in January, a 10% increase from December, and 3,846 new job postings added during the month.  

Among the 19 specific industry sectors TIPRO uses to define the Texas oil and natural gas industry, Support Activities for Oil and Gas Operations has the most unique job listings, followed by gasoline stations with convenience stores, petroleum refineries and pipeline transportation of natural gas. Houston, Midland, Dallas and Odessa reported the greatest number of total unique oil and natural gas job postings. The companies with the greatest number of unique job postings in January were Love’s, Energy Transfer, ExxonMobil and Baker Hughes, according to the analysis. 

In January, Texas’ not seasonally adjusted unemployment rate was higher at 4.5% but less than the national rate of 4.7%. 

Unemployment rates in the Permian Basin were lower than the state and national average. 

Midland and San Angelo MSA’s reported not seasonally adjusted unemployment rates of 3.4% and 3.5%, respectively.

"Texas oil and gas producers remain the backbone of American energy dominance. Our state's leadership in energy policy, innovation, efficiency, and operational excellence has enabled sustained production levels alongside disciplined workforce management,” Longanecker said. “It is essential that federal policies support expanded domestic development through streamlined permitting, reduced regulatory burdens, and pro-energy initiatives. These measures will safeguard high-paying jobs across Texas, bolster investment, expand critical infrastructure, and ensure affordable, secure energy for the nation and our allies."