Activity and spending in U.S. oil fields is soaring this year as the industry recovers from last year’s pandemic-driven oil price crash, according to cautiously optimistic energy company executives polled by the Federal Reserve Bank of Dallas in a survey released on March 24.

While improved oil prices have boosted expectations for 2021, executives are cautious about the potential for Biden administration oil and gas policy changes or the threat that OPEC and partners could easily return oil to the global market.

“While the price increases have been welcome news, OPEC+ is a sword of Damocles: if U.S. operators raise capital expenditures, OPEC+ will open its taps and flood the market,” one executive said. “There is a tense detente currently.”

The COVID-19 pandemic dented global oil demand, prompting deep cuts in drilling last year by shale oil producers.

More than half of executives said they were not hiring more workers and were concerned the administration of President Joe Biden—a Democrat who defeated Republican Donald Trump in the November election—would take a tough stance on regulation.

“I believe that it is their goal to effectively shut down our industry, and they will pursue that end with great energy,” one executive said.

Several executives also cited the potential for greater regulation in New Mexico, a Democratic-leaning state with lots of federal land and a large slice of the Permian Basin, the top U.S. oil field.

New restrictions could boost oil prices, but also create “political risk and pose a long-term threat,” one executive said.

Survey respondents expect a U.S. oil price of $61/bbl by year-end, around the same level where it traded on March 24.

Companies reported a breakeven price of $50/bbl, $1 higher than last year, to drill in the Permian Basin.

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