Regional banks that lend into the oil and natural gas sector say they are increasingly active as producers borrow to invest in growth amid enduring strong demand for fossil fuels.

To be sure, national banks such as JPMorgan Chase and Well Fargo & Co. have pulled back on oil and gas lending amid pressure from investors to combat climate change. At the same time, some large publicly traded exploration and production (E&P) companies, under similar pressure, have only nudged up oil and gas output this year.

But others, including private E&Ps, are ramping up production this year – oil output reached a pandemic-era high in early August as a result – and regional banks in states such as Texas and Oklahoma say they are committed to supporting the industry this year and...