Last week I wrote about record oilfield pay landing on a flat patch. This week the state gave us the local sequel, and it is a genuinely remarkable number. North Dakota oil did something in May it has not done in about 40 years. Let me explain what happened, why it matters for our region, and just as importantly, why the people running the numbers are telling you not to get carried away.
Why did North Dakota oil sell for a premium for the first time in 40 years?
North Dakota crude normally sells at a discount to the West Texas Intermediate benchmark, because it costs money to move our oil hundreds or thousands of miles to market. In May that flipped. According to the North Dakota Monitor, state crude sold for an average of $2.56 more per barrel than WTI, a premium the North Dakota Pipeline Authority had to go back to 1986 to match.
The cause was the Iran war and the closure of the Strait of Hormuz, which disrupted global supply and pushed prices at hubs like the end of the Dakota Access Pipeline above the benchmark. When the world worries about oil getting to market, oil that is already flowing out of the Bakken suddenly looks more valuable, not less.
Is the North Dakota oil premium going to last?
The state's own experts say no, and I am going to trust the people who watch this daily over any headline. Justin Kringstad, who directs the North Dakota Pipeline Authority, called it "certainly an anomaly" and said plainly, "I don't anticipate this to continue long term." He described it as a noteworthy event for the Williston Basin, with indicators pointing to it being temporary.
You can see the caution in the field itself. Despite these high prices, North Dakota's active drilling rig count actually dropped to 24, and the state expects to gain just one rig shifting over from Montana. Compare that to Texas, where operators can deploy rigs faster and cheaper, and where most of the national rig growth is happening. If this premium were seen as durable, you would see iron moving into the Bakken. You are not.
This is the same story I told last week, just with a state budget attached. The money is real and the milestone is real, but the growth behind it is not. When the people whose entire job is forecasting North Dakota oil tell you a number is temporary, believe them, and plan your life around the steady figure, not the spike.
Treat the premium as a nice surprise for the state's checkbook, not as a signal to stretch on a home purchase. Spikes that officials expect to fade are exactly the kind you should not borrow against.
How does $29 million in extra oil revenue actually help Western North Dakota?
Here is the part worth being genuinely glad about. That extra $29 million in oil tax revenue is real money that flows into the systems that make our communities work. North Dakota channels oil tax dollars into infrastructure, schools, and the kind of long-term funds that steady the state through downturns. A month where oil came in around 70% above the budget forecast is a cushion, and cushions are exactly what turn a boom-and-bust region into a place you can raise a family and own a home with confidence.
This connects to something I keep coming back to. Williston was just named the top micropolitan area in the country, and the region has spent years diversifying beyond the wellhead into retail, healthcare, and infrastructure, much of it tracked by Williston Economic Development. A revenue windfall on top of a diversifying base is not a reason to gamble. It is a reason to feel steady about the long-term value of property here.
Strong state revenue supports the roads, schools, and services that hold up home values over decades. That is the slow, boring, durable kind of good news, and it is the kind that actually matters when you own a home.
Should I buy property in Williston right now because oil prices are high?
Not because of the oil price, no, and this holds whether you are buying a first home, a rental, a commercial building, a shop or industrial lot, or a parcel of land. Buy because your timeline in the area is long enough and the numbers work on steady, conservative assumptions. I have negotiated across residential, commercial, industrial, and land deals in this region through every kind of market, and the buyers who do well are never the ones chasing a price headline. They are the ones who run the math on the quiet month and let a good month be a bonus.
That discipline looks a little different by property type, and it matters for each. A homeowner should qualify on base income, not a spike-inflated paycheck. An investor should underwrite rents on normal occupancy, not boom-era demand. A commercial or industrial buyer should pencil the deal on steady operations, not a wartime oil premium that the state itself expects to fade. A land buyer should think in years and infrastructure, not this month's barrel price. The current environment is genuinely favorable in the ways that count: a diversified local economy, a state budget getting a boost, and real demand across every property class. None of that changes the discipline, and giving people that honest read across all four categories is a big part of why we are the team folks call before they buy anything in the Bakken.
Let the strong region give you confidence, and let steady, conservative numbers set your budget, whether you are buying a house, a rental, a building, or land. Those two things together are how you buy well here.
The North Dakota oil premium, answered plainly
What does it mean that North Dakota oil sold at a premium?
It means Bakken crude briefly sold for more than the West Texas benchmark, about $2.56 more per barrel in May, instead of its usual discount. It is the first significant premium since 1986, caused by global supply fears from the Iran war rather than by anything permanent about North Dakota production.
How much extra money did the premium bring North Dakota?
The Pipeline Authority estimates roughly $29 million in additional oil tax revenue in May compared to what the state would have collected under the prior year's average discount.
Will high oil prices bring back an oil boom in the Bakken?
The signs say no. Despite high prices, North Dakota's active rig count fell to 24 and operators are favoring Texas, where rigs are cheaper and faster to deploy. High prices without new rigs is the opposite of a boom.
Is now a good time to buy property in Williston?
It can be, whether you are looking at a home, a rental, commercial or industrial space, or land, if your timeline is long enough and the numbers work on steady assumptions. The strong regional economy is a reason for confidence, but the temporary oil premium should not be the reason you buy or the basis for your budget in any category.
How does the oil premium affect commercial, industrial, and land buyers, not just homeowners?
The same way: it is a short-term revenue boost for the state, not a signal of lasting growth. Investors should underwrite rentals on normal occupancy, commercial and industrial buyers should pencil deals on steady operations rather than a wartime price, and land buyers should think in terms of infrastructure and years. Strong state revenue supports all of it long term, but no asset class should be bought on a spike officials call temporary.
Does strong oil revenue make Williston property values safer?
Over the long run, yes, indirectly, and across every property type. Oil tax revenue funds infrastructure, schools, and reserve funds that support communities and property values through downturns. Combined with the region's diversification beyond oil, that makes for steadier demand for homes, rentals, commercial space, and land than the old boom-and-bust cycle.
What happens to North Dakota oil prices when the Iran war situation calms down?
State officials expect the premium to fade and North Dakota crude to return to its usual discount to the benchmark. That is exactly why they are calling this an anomaly and why no one is moving rigs in to chase it.
North Dakota oil did something in May it had not done in 40 years, and the state is $29 million better off for it. That is a real milestone and genuinely good news for the place we live and work. But the people who forecast this for a living are telling us it is temporary, and the flat rig count agrees with them.
So enjoy the headline, be glad for the state's checkbook, and keep your own decisions grounded in the steady numbers. When you want to figure out what you can truly afford in this market, on your base income and not a barrel price, come talk to us and we will give you the straight read.
EP
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