Oil and Gas Rigs Still Near 3-Year Low and We Need More Online

In the ever-volatile world of energy, the oil and gas sector is facing a paradoxical challenge: rig counts remain stubbornly low, hovering near three-year lows, even as global demand continues to push boundaries. As of August 2025, the global rig count stands at approximately 1,633 active rigs, a figure that reflects ongoing caution among producers amid economic uncertainties and shifting market dynamics. This low activity comes at a time when more rigs are desperately needed to bring additional capacity online to combat natural production declines and sustain supply. In this article, we’ll dive into the latest rig count data broken down by region, country, and U.S. states (where available), examine OPEC and OPEC+’s plans to ramp up production—and whether they can deliver—and explore the critical shortage of investment in drilling programs. Finally, we’ll calculate the investment required to offset normal decline curves and meet current global demand.

Global Oil and Gas Rig Counts: Stuck in Neutral

According to the latest data from Baker Hughes, the global oil and gas rig count as of early August 2025 is near its lowest level in three years, with only marginal fluctuations week-over-week.

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The total worldwide count is estimated at around 1,633 rigs, combining U.S. (539), Canada (180), and international (914). This represents a decline from higher levels seen in 2022 and 2023, when global counts often exceeded 1,800 amid post-pandemic recovery efforts.

Unfortunately, granular regional data beyond North America is limited in the latest updates, but historical trends show the Middle East (e.g., Saudi Arabia and UAE) and Asia Pacific (e.g., China) as key drivers of international activity.

Breakdown by Country

Major oil-producing countries account for the bulk of global rigs, but activity remains subdued. The U.S. and Canada dominate North America, while international leaders include Saudi Arabia, Russia, and China. Specific country-level data for August 2025 is sparse, but approximate figures from recent reports indicate:

• United States: 539 rigs (down 1 from late July 2025; down 49 year-over-year).

  Oil rigs: 411; Gas rigs: 123.
• Canada: 180 rigs (up 3 from late July 2025; down 37 year-over-year).
• Saudi Arabia: Approximately 100-110 rigs (stable, focused on maintaining spare capacity).
• Russia: Around 300 rigs (resilient despite sanctions, but data variability exists).
• China: Roughly 200-250 rigs (growing steadily in onshore fields).
• Other Key Countries: UAE (50), Iraq (40), Brazil (20), Norway (15).

These figures highlight a global hesitancy, with non-OPEC countries like the U.S. seeing the sharpest declines.

Breakdown by U.S. State/Basin

In the U.S., rig activity is concentrated in key basins, which often span multiple states. Although state-level data isn’t always explicitly broken out, basin reports offer valuable insights. As of August 2025, the U.S. count is at its lowest since December 202

Major basins include:

• Permian Basin (primarily Texas and New Mexico): ~250-300 rigs (largest share, but down year-over-year due to efficiency gains and lower prices).
• Eagle Ford (Texas): ~50 rigs.
• Bakken (North Dakota): ~30-40 rigs.
• Haynesville (Louisiana/Texas, gas-focused): ~40 rigs.
• Marcellus/Utica (Pennsylvania/Ohio, gas): ~30 rigs.
• Other States: Oklahoma (20 rigs in Anadarko Basin), Colorado (10 in DJ Basin), Alaska (~5-10).

Texas alone hosts over 40% of U.S. rigs, followed by New Mexico, Louisiana, and North Dakota. This concentration underscores the Permian’s role as the engine of U.S. production, but even there, activity is muted.OPEC and OPEC+: Plans to Increase Production, But Can They Deliver?OPEC+ has been signaling a gradual unwind of production cuts, with plans to boost output by approximately 547,000 barrels per day (bpd) starting in September 2025.

This follows similar hikes in prior months, such as 548,000 bpd in August and 411,000 bpd in June, as the group aims to fully phase out voluntary cuts of 2.2 million bpd by September 2026.

Key contributors include Saudi Arabia, Russia, and the UAE, with Russia potentially raising to 9.449 million bpd.

But can they? In the short term, yes—OPEC+ holds substantial spare capacity, estimated at 5.7 million bpd as of April 2025, largely concentrated in Gulf producers like Saudi Arabia.

This buffer allows for quick ramps-up, and projections show global supplies rising to 104.6 million bpd in 2025.

However, long-term sustainability is questionable due to underinvestment. Natural decline rates in mature fields could erode this capacity without fresh drilling, and geopolitical tensions add risk.The Investment Shortage: Failing to Keep Pace with Decline CurvesA core issue plaguing the industry is insufficient investment in upstream drilling programs. Global upstream oil investment is set to fall 6% to around $420 billion in 2025, with total upstream oil and gas spending at under $570 billion—a 4% decline overall.

U.S. tight oil and shale gas, accounting for 15% of global upstream spend, are expected to see a 10% dip.

This shortfall exacerbates natural production declines, where existing fields lose 4.5-6.7% of output annually without intervention.

Some estimates suggest rates up to 8%, and without investment, global supplies could plummet by over 15 million bpd in the first year alone.

The transition to renewables is diverting capital, with clean energy investments hitting $2.2 trillion in 2025—twice that of fossil fuels.

While this is positive for sustainability, it leaves oil and gas vulnerable to supply crunches if demand doesn’t peak as quickly as forecasted.Calculating the Investment Needed to Meet Current DemandTo quantify the investment gap, let’s calculate the annual upstream spending required to offset natural declines and maintain current global oil demand. We’ll use transparent, step-by-step reasoning based on industry data.

1. Global Oil Demand/Production Baseline: Forecasts for 2025 peg average demand at 105 million bpd. Supply is slightly higher at ~105 million bpd, but we’ll use 105 million bpd as the level to sustain
2. Natural Decline Rate: Average global decline for existing fields is 5% per year (a conservative midpoint from 4.5-6.7%).

   Calculation: 5% of 105 million bpd = 5.25 million bpd annual decline.

3. New Production Needed: To maintain flat production (meeting current demand without growth), we need to add at least 5.25 million bpd of new capacity annually. (Note: Demand growth is ~0.7 million bpd in 2025, so total new capacity for growth would be ~6 million bpd, but we’ll focus on sustaining current levels as per the query.)
4. Capital Cost per Incremental Barrel: Upstream capital expenditure (capex) per barrel of oil equivalent (boe) for new production varies but averages ~$6-8 per boe for majors, rising due to inflation and complexity.

   However, for full development (including finding, development, and bringing online), industry estimates suggest $15-20 per boe of reserves added, translating to production over time. To simplify, we’ll use a macro-level estimate: Historical data implies ~$100-130 per bpd of new daily capacity (derived from total upstream spend divided by incremental output). But for precision, let’s use $110,000 per incremental million bpd (based on aggregated reports where $570 billion sustains ~5-6 million bpd additions).

5. More accurately, scaling from IEA and industry outlooks: To add 1 million bpd requires ~$100-120 billion in upstream capex (accounting for exploration, drilling, and infrastructure).

   Thus, for 5.25 million bpd: 5.25 × $110 billion = ~$577.5 billion.

6. Total Investment Needed: Approximately $580-700 billion annually in upstream oil and gas to offset declines and sustain demand, aligning with estimates like $4.3 trillion cumulative from 2025-2030 (~$717 billion/year).

   Current forecasts: Only $570 billion in 2025.

   Shortfall: $10-130 billion, risking future supply gaps.

This calculation assumes steady decline rates and average costs; real-world variables like field maturity or tech efficiencies could adjust it. The math highlights a clear need: Without ramped-up investment, production will falter, potentially spiking prices.

The Path Forward: Time to Get More Rigs Online

The data paints a stark picture—rig counts at multi-year lows, OPEC+ pushing increases from spare capacity, but a looming investment drought threatening long-term stability. To avoid disruptions, the industry must prioritize drilling investments, potentially requiring $580-700 billion annually just to tread water. Policymakers, investors, and producers need to act now to bring more rigs online, ensuring energy security in a world still reliant on oil and gas. Stay tuned to Energy News Beat for updates on this critical story.

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