Why Gas Prices Remain High Despite North Dakota’s Oil Production
- Domestic crude oil benchmarks have approached $100 per barrel, yet the oil and gas industry in North Dakota is not significantly increasing drilling activity.
- Current activity levels in North Dakota remain virtually unchanged, with approximately 25 drilling rigs and eight frack crews active in the state.
- The surge in oil prices is closely linked to geopolitical instability in the Middle East.
Domestic crude oil benchmarks have approached $100 per barrel, yet the oil and gas industry in North Dakota is not significantly increasing drilling activity. This trend represents a departure from the traditional boom-and-bust cycles historically seen in the Bakken region, where high prices typically triggered a rapid increase in new well drilling.
Current activity levels in North Dakota remain virtually unchanged, with approximately 25 drilling rigs and eight frack crews active in the state. According to regulators, this stability is largely the result of industry consolidation, which has left the state’s oil and gas sector dominated by some of the largest energy companies in the United States.
Global Market Pressures and Domestic Prices
The surge in oil prices is closely linked to geopolitical instability in the Middle East. Nathan Anderson, director of the Department of Mineral Resources, stated that oil price projections are heavily dependent on the duration of the war with Iran and the length of time the Strait of Hormuz remains closed to shipping.
The closure of the Strait of Hormuz has contributed to a dramatic rise in costs for U.S. Households. Before the start of the war, crude oil prices were approximately $70 per barrel, with West Texas Intermediate (WTI) at $67 and Brent Crude at $72. By March 2026, Brent Crude reached $103.20 and WTI settled at $95.54.
These global benchmarks have directly impacted the price of gasoline. One month prior to the price spike, the average price at the pump was approximately $2.92 per gallon. By Tuesday, March 18, 2026, that average increased to $3.79 per gallon.
The vulnerability of U.S. Gas prices to events in the Middle East persists despite the United States producing more energy than it consumes. Crude oil imports continue to account for approximately two-thirds of U.S. Energy imports, meaning domestic consumers remain tied to global pricing benchmarks.
Industry Resistance to Price Surges
The lack of a drilling surge in North Dakota is attributed to the corporate structure of the current industry. Because the sector is now dominated by large energy firms, operational plans are governed by long-term financial planning rather than immediate price fluctuations. These companies have already established their 2026 budgets and those allocations are unlikely to change rapidly.
I don’t foresee them making rapid changes until there’s a price stabilization. Then they’ll most likely adjust accordingly.
David Tabor, senior field operations manager for the North Dakota Department of Mineral Resources
Rather than investing in new drilling operations, industry leaders are expected to focus on optimizing existing production. This strategy includes the potential reactivation of some of the state’s 2,835 inactive wells to increase output without the capital expenditure required for new wells.
Economic Implications for North Dakota
North Dakota lawmakers are monitoring oil prices and production levels closely due to the critical role oil revenue plays in the state budget. While the industry is resisting a rapid expansion, the stability of current production levels remains a focal point for state financial planning.
The current market environment highlights a shift in how the Bakken region responds to economic incentives. A decade ago, prices nearing $100 per barrel would have prompted a scramble to drill, but the current era of consolidation and fixed annual budgeting has muted that response.