In the ever-volatile world of energy markets, the U.S. oil and gas sector continues to defy simple narratives. As of late October 2025, the U.S. rig count has dipped to 550 active rigs, marking a decline of 35 rigs compared to the same period last year.
This drop comes even as domestic crude production hovers near record highs, driven by technological efficiencies that allow fewer rigs to extract more oil. Meanwhile, inventories are experiencing notable draws, particularly at key storage hubs like Cushing, Oklahoma, amid broader global concerns over sluggish demand and an impending supply glut.
This paradoxical trend—fewer rigs but sustained high output—highlights the maturation of shale plays, where operators prioritize productivity per well over sheer drilling volume. However, the rig slowdown raises questions about future supply sustainability, especially as global oil markets grapple with oversupply risks heading into 2026.
Global Rig Counts: A Mixed PictureWorldwide, the rig count paints a varied landscape. The latest data from September 2025 shows an international rig count (excluding North America) of 1,084, up by 8 from the prior month but down 72 year-over-year. North America contributes additional activity, with the U.S. at 550 rigs and Canada at 199, bringing the global total into the low thousands when combined.
Breaking it down by commodity:
Oil Rigs: Dominant globally, reflecting sustained focus on crude amid energy transition pressures.
Natural Gas Rigs: Fewer in number, as gas markets face their own volatility from LNG exports and renewable competition.
Detailed country-level breakdowns for international rigs are monthly and show key producers like Saudi Arabia adjusting methodologies for accuracy, but overall activity remains subdued in regions like the Middle East and Latin America due to OPEC+ production curbs.
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Major contributors include:
|
Country/Region
|
Total Rigs (Sept 2025)
|
Oil Rigs
|
Gas Rigs
|
Notes
|
|---|---|---|---|---|
|
Middle East (Aggregate)
|
~400-500 (est.)
|
High
|
Moderate
|
Influenced by OPEC+ decisions; Saudi updates exclude idle rigs.
rigcount.bakerhughes.com
|
|
Latin America
|
~150-200 (est.)
|
Balanced
|
Low
|
Brazil and Mexico lead, but down yoy.
|
|
Europe & Africa
|
~200-300 (est.)
|
Low
|
High in gas-prone areas
|
Ukraine now included in counts.
rigcount.bakerhughes.com
|
|
Asia-Pacific
|
~200 (est.)
|
Moderate
|
High
|
Excludes onshore China.
|
These figures underscore a global slowdown, with non-OPEC growth in places like Brazil and Guyana offsetting cuts elsewhere.
U.S. Rig Counts: Breakdown by State and Basin
In the U.S., the rig count’s decline is unevenly distributed, with oil rigs at 420 (up slightly week-over-week) and gas rigs at 121.
Miscellaneous rigs make up the balance. Texas, the epicenter of U.S. production, has seen its count fall to around 242, the lowest in years, reflecting caution amid price uncertainty.
By state (based on recent trends and historical splits):
|
State
|
Total Rigs
|
Oil Rigs
|
Gas Rigs
|
Change (YoY)
|
|---|---|---|---|---|
|
Texas
|
242
|
~200
|
~40
|
Down significantly
|
|
New Mexico
|
~100 (est., part of Permian)
|
High
|
Low
|
Stable
|
|
North Dakota
|
~30
|
High
|
Low
|
Down
|
|
Pennsylvania
|
~37 (Appalachian focus)
|
Low
|
High
|
Up slightly in gas
|
|
Oklahoma
|
~40 (est.)
|
Balanced
|
Moderate
|
Down
|
|
Louisiana
|
~20-30 (est.)
|
Moderate
|
High
|
Stable
|
Major basins tell a similar story of efficiency-driven consolidation:
|
Basin
|
Total Rigs
|
Oil Rigs
|
Gas Rigs
|
Key Insights
|
|---|---|---|---|---|
|
Permian (TX/NM)
|
250
|
~220
|
~30
|
Down 5 from August; still the workhorse of U.S. output.
getscalefunding.com
|
|
Williston (Bakken, ND)
|
30
|
High
|
Low
|
Unchanged; mature play with high per-rig yields.
|
|
Appalachian (PA/WV/OH)
|
37
|
Low
|
High
|
Up 1; gas-focused amid LNG export boom.
|
|
Eagle Ford (TX)
|
~50 (est.)
|
Balanced
|
Moderate
|
Declining activity.
|
|
Haynesville (LA/TX)
|
~40 (est.)
|
Low
|
High
|
Gas rigs holding amid demand.
|
These reductions align with broader industry caution, as capital discipline prevails over expansion.
Oil Demand, Glut Concerns, and Cushing DrawsGlobal oil demand remains sluggish, particularly in China, where economic headwinds have tempered growth forecasts. The International Energy Agency (IEA) projects a potential surplus of up to 4 million barrels per day (bpd) in 2026 if OPEC+ unwinds cuts amid rising non-OPEC supply from the U.S., Brazil, and Canada.
This glut fear has pushed prices to five-month lows, with Brent and WTI settling around $60-65 per barrel in late October 2025.
Yet, current draws from inventories suggest short-term tightness. U.S. crude stocks fell by nearly 7 million barrels in the week ending October 24, 2025, defying expectations.
At Cushing—the delivery point for WTI futures and a barometer for Midcontinent supply—storage levels have trended downward throughout 2025, hitting near-decade lows around 20-30 million barrels (down 40% from year-start in some reports).
Recent weeks showed a modest gain of 1.4 million barrels, but overall utilization remains low at ~30-40% of capacity.
Why the decline in Cushing stocks? Several factors converge:
Strong Refining and Export Demand: U.S. refiners are running at high rates, pulling crude southward via expanded pipelines like Keystone and Diamond. Exports have surged, bypassing Cushing for Gulf Coast terminals.
Pipeline Infrastructure Shifts: New and upgraded lines allow crude to flow directly from production sites (e.g., Permian) to refineries and ports, reducing the need for Cushing as a midpoint hub.
Seasonal and Tax Dynamics: Year-end tax measures and maintenance cycles have accelerated draws, while global demand recovery post-disruptions adds pressure.
Operational Concerns: Low levels raise risks of quality issues (e.g., sediment in tanks) and minimum operating thresholds, potentially impacting WTI pricing.
Despite these draws, the longer-term outlook is bearish. The World Bank forecasts Brent at $60/bbl by 2026 due to expanding glut, with non-OPEC+ supply overwhelming demand growth.
OPEC+’s gradual output hikes—137,000 bpd in November—exacerbate this, even as geopolitical easing (e.g., U.S.-China trade tensions) tempers upside risks.
Outlook: Balancing Act Ahead
The U.S. rig decline amid record production exemplifies the industry’s pivot to efficiency, but it can’t fully offset global glut pressures. As inventories draw down—evident in Cushing’s lows—short-term price support may emerge. However, without stronger demand from Asia or supply discipline from producers, 2026 could see a “crude awakening” with oversupply dominating.
Energy stakeholders should monitor EIA and IEA reports closely for shifts in this delicate balance.
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