Somewhere between the oil fields of West Texas and a refinery outage halfway across the world, the price you pay at the pump gets decided. This year, that connection got a lot more visible. Refining disruptions abroad tightened the supply of diesel and gasoline just as global oil inventories kept falling, pushing Brent crude to $91 a barrel in August and diesel prices toward record highs. But American producers responded fast: the Permian and new Gulf of America projects pushed U.S. crude output to an all-time high, setting up what the EIA now expects to be a gradual cooldown in prices by 2027, a shift Texas will feel first. Let our commercial energy consultants walk you through the latest Short-Term Energy Outlook and how your local Texas budget reflects the realities of the current market.
The Permian Boom Meets Its Limits
Higher oil prices are usually good news for Texas, but this cycle looks different from past booms. WTI crude has averaged around $84 a barrel through August, comfortably above the Permian’s breakeven costs of $63 to $69 a barrel, which is exactly the kind of margin that normally sends drilling activity into overdrive. The Permian is still growing, forecast to reach 6.8 million barrels a day in 2026, up 3% from last year, and the basin now supports more than 940,000 jobs nationwide while contributing $114 billion to the U.S. balance of trade. But the Dallas Fed’s own survey found that 73% of energy executives expect no more than 0.25 million barrels a day of additional production this year, A modest response outlining the opinion of our commercial energy consultants.
For Texas oilfield service companies, suppliers, and local economies built around drilling cycles, that means this boom may bring steadier, more measured growth rather than the rapid hiring surges of past price spikes.
⛽ Read more: 5 Ways Your Business Can Prepare for the Future
Refineries and Retailers Feel a Different Kind of Squeeze
While the Permian pumps crude, it’s Texas refineries, especially along the Gulf Coast, that are absorbing the pressure from a global refining shortfall. Disruptions overseas have widened the gap between crude oil costs and what refiners charge for finished diesel and gasoline, and Texas is now supplying fuel far beyond its own borders.
El Paso just got its own benchmark diesel and gasoline pricing for the first time, a direct response to West Coast refineries shutting down and California leaning on Gulf Coast and midcontinent supply to fill the gap.
Our commercial energy consultants in Texas are watching over trucking companies, construction firms, and practically any business running a diesel fleet; even with Texas refineries humming, being the fuel source for other regions can mean local businesses compete with out-of-state demand for the same barrels.
It’s not a crude oil shortage; it’s a refining problem. Disruptions abroad in Russia, China, and the Middle East knocked out refining capacity that specialized in turning crude into diesel and jet fuel. That created a supply gap for finished fuel even as raw crude output climbed, and diesel got hit harder than gasoline because of how that lost capacity was split across fuel types.
FAQ
How high are diesel prices expected to go in 2026?
The EIA’s September Short-Term Energy Outlook forecasts retail diesel averaging $5.07 a gallon for 2026, revised up from $4.85 in the prior month’s forecast. The distillate crack spread, the margin refiners earn on diesel, jumped 20.8% month-over-month to $1.57 a gallon.
When will oil and diesel prices come down?
The EIA expects Brent crude to hold near $90 a barrel through the second half of 2026 before easing to an average of $74 a barrel in 2027, as U.S. production keeps rising and global inventories rebuild. Meaningful relief is a 2027 story, not something businesses should expect before year-end 2026.
Why is the Permian Basin still growing if oil prices are already high?
WTI crude averaging around $84 a barrel through August sits well above the Permian’s breakeven costs of $63 to $69 a barrel, which historically triggers rapid drilling growth. This cycle is more measured: a Dallas Fed survey found 73% of energy executives expect no more than 0.25 million barrels a day of additional production this year, a modest response by past standards.
Onyx Commercial Energy Consultants: What to Do Now?
Business owners with fuel-dependent operations should plan for diesel costs to stay elevated through 2026 before any meaningful relief in 2027, while those weighing new facility locations or expansions tied to the grid should watch how the ERCOT audit plays out before assuming rapid capacity growth. Texas remains the epicenter of American energy, but 2026 is shaping up to be a year of recalibration as much as growth.
Related content: What You Need to Know about an Energy Audit
Onyx’s team of business energy consultants delivers strategic value by stress-testing client portfolios against scenarios in which demand overshoots, plateaus, or falls short. In Texas, this means helping businesses quantify future bill exposure linked to demand, identify levers to reshape that exposure, and implement contracts, onsite resources, or demand flexibility to keep energy costs manageable regardless of market fluctuations.
By choosing Onyx Power as your consultant, you will ensure that you optimize your company’s resources, consume less energy overall, and ultimately pay less for your essential energy needs.
Sources
- U.S. Energy Information Administration (EIA) — Short‑Term Energy Outlook, September 2026
- U.S. Energy Information Administration (EIA) — United States on Track for Record Crude Oil Production in 2026
- U.S. Energy Information Administration (EIA) — Elevated Crack Spreads and Crude Oil Prices Contribute to Higher Prices at the Pump
- Federal Reserve Bank of Dallas — Oil Prices Are Up; Whither the Texas Boom?
- Federal Reserve Bank of Dallas — Energy Indicators, May 2026
- World Oil — Permian Basin Supports 940,000 U.S. Jobs, Drives Billions in Economic Impact
- BOE Report — Permian Strategic Partnership Highlights $2.3 Billion in Regional Investment and Expanding Economic Impact Across the Permian Basin
