The oil and gas industry enters the second quarter of 2025 with cautious optimism. Production remains steady, particularly in the Permian Basin and Mid-Continent regions, but under the surface, there’s growing anxiety about the broader economy. With recession fears creeping back into headlines, the stakes are high for energy-producing states like Oklahoma and Texas.
The potential for a U.S. recession in 2025 is real, even if the timing and severity remain uncertain. Wall Street analysts are split, forecasts range from a 15% to 40% chance, but what’s clear is that oil and gas will be on the front lines if the economy slows. A downturn would hit demand for energy, compress oil prices, and pressure operators across the board, from supermajors to mom-and-pop drillers.
While the Permian is still growing with companies like Chevron planning to hit 1 million barrels per day by year-end, growth is slower and more calculated than the previous boom cycles. Operators are hyper-focused on efficiency and capital discipline. If a recession hits and crude prices slip, expect drilling activity and rig counts to follow suit.
The Mid-Con, always more sensitive to price swings, could see a sharper pullback. While producers have been quietly boosting production using better technology and infrastructure, the region doesn’t have the same scale or buffer as the Permian. Jobs in Oklahoma’s oilfield service sector from roustabouts to directional drillers could be some of the first casualties if rigs get stacked.
Rig counts are already showing signs of softness. The U.S. total has dipped slightly year-over-year, and although February brought a small bump in upstream hiring in Texas, that momentum could fade quickly in a recessionary environment. Service companies, which rely on steady drilling activity, are particularly vulnerable. The ongoing trend of consolidation in that space may accelerate, especially among smaller firms that lack the balance sheets to weather prolonged slowdowns.
In Texas and Oklahoma alike, the energy industry isn’t just a sector, it’s an economic backbone. If a recession drives oil below the break-even mark for new drilling, the ripple effects will be felt far beyond the oilfields. From real estate to restaurants, entire local economies depend on a healthy energy workforce.
If there’s one lesson from the past few years, it’s that the oil and gas sector is resilient, but not recession-proof. The question isn’t whether the Permian and Mid-Con can produce; it’s whether demand, prices, and policy will let them thrive.
