The U.S. Energy Information Administration (EIA) has updated its Short-Term Energy Outlook (STEO), forecasting that U.S. crude oil production will average 13.5 million barrels per day (b/d) in both 2025 and 2026.
This projection comes on the heels of a record-breaking July 2025, when U.S. crude oil output hit an all-time high of 13.6 million b/d, up from 13.5 million b/d in June.
The surge was driven by faster-than-expected ramp-ups in offshore projects in the Gulf of America, prompting the EIA to revise its forecasts upward by 100,000 b/d for the remainder of 2025 and 200,000 b/d for 2026 compared to previous estimates.
Despite the recent peak, the EIA anticipates a gradual decline from July’s high as falling global oil prices exert downward pressure on domestic production.
Brent crude prices are expected to average $69 per barrel in 2025 and drop sharply to $52 per barrel in 2026, contributing to a global oversupply and rising inventories.
This outlook reflects a 0.6% increase for 2025 and a 1.6% increase for 2026 from the prior month’s forecast, building on a stronger-than-anticipated baseline from mid-2025 production data.
Crude Oil Production: Key Basins and Regions Driving Growth
U.S. crude oil production has been bolstered by key shale plays and offshore developments, with the Permian Basin and the Gulf of America emerging as critical contributors.
In 2024, output averaged 13.2 million b/d, largely led by growth in these areas.
Looking ahead, the EIA has raised its Gulf of America forecast to an average of 1.89 million b/d in 2025 (up from 1.84 million b/d previously), with production stabilizing around 1.8 million b/d in both 2025 and 2026 due to accelerated project timelines.
Based on the EIA’s Drilling Productivity Report (DPR), which provides insights into major shale basins, the Permian Basin remains the powerhouse for onshore oil production.
Recent data shows the Permian accounting for over 6.1 million b/d, dwarfing other regions like the Bakken (1.3 million b/d) and Eagle Ford (1.1 million b/d).
Short-term projections indicate continued growth in the Permian, with an expected increase of 18,000 b/d month-over-month, highlighting its efficiency gains—new-well oil production per rig rose by 14 barrels per day.
Other basins like the Eagle Ford show modest gains (4,000 b/d), while areas such as the Niobrara and Appalachia exhibit flat or declining trends.
|
Basin/Region
|
Current Production (thousand b/d, latest estimate)
|
Short-Term Growth Projection (thousand b/d)
|
Role in 2025-2026 Projections
|
|---|---|---|---|
|
Permian
|
6,169
|
+18
|
Dominant onshore driver; expected to sustain high output amid efficiency improvements. |
|
Gulf of Mexico
|
~1,800 (annual average projection)
|
Upward revision for faster ramp-ups
|
Key offshore contributor; forecast at ~1.8-1.9 million b/d. |
|
Bakken
|
1,313
|
0
|
Stable but secondary; limited growth expected. eia.gov
|
|
Eagle Ford
|
1,102
|
+4
|
Modest contributor; some efficiency gains. eia.gov
|
|
Others (e.g., Anadarko, Niobrara)
|
<400 each
|
Flat to negative
|
Minor roles; potential declines due to lower prices. eia.gov
|
The Permian’s dominance is expected to persist into 2025 and 2026, as it benefits from high rig productivity and vast reserves, even as overall U.S. production plateaus amid price pressures.
Natural Gas Production: Major Basins Accounting for the Bulk of Output
On the natural gas front, the EIA projects U.S. dry natural gas production to average 107 billion cubic feet per day (Bcf/d) in both 2025 and 2026, marking upward revisions of 0.5% for 2025 and 1.3% for 2026 from prior forecasts.
This growth supports rising liquefied natural gas (LNG) exports, expected to reach 15 Bcf/d in 2025 and 16 Bcf/d in 2026, driven by new capacity from projects like Plaquemines LNG and Corpus Christi LNG Stage 3.
The Appalachia, Permian, and Haynesville basins are pivotal, projected to account for 69% of total U.S. natural gas production in 2026.
Current DPR data underscores their importance: Appalachia leads with 36 Bcf/d, followed by the Permian at 25 Bcf/d and Haynesville at 15.6 Bcf/d.
Short-term trends show the Permian gaining 143 million cubic feet per day (MMcf/d), while Appalachia and Haynesville face declines of 176 MMcf/d and 267 MMcf/d, respectively, potentially due to market dynamics.
eia.gov
|
Basin
|
Current Production (MMcf/d, latest estimate)
|
Short-Term Growth Projection (MMcf/d)
|
Role in 2025-2026 Projections
|
|---|---|---|---|
|
Appalachia
|
35,967
|
-176
|
Largest producer; core to sustaining output despite potential slowdowns. |
|
Permian
|
25,250
|
+143
|
Strong growth; associated gas from oil production boosts totals. |
|
Haynesville
|
15,606
|
-267
|
Key dry gas play; supports LNG exports but may see price-induced adjustments. |
|
Others (e.g., Anadarko, Eagle Ford)
|
<7,500 each
|
Flat to negative
|
Supplementary; limited impact on overall growth. eia.gov
|
These basins’ combined strength will help maintain elevated production levels, leading to higher storage inventories (3,380 billion cubic feet in 2025 and 3,020 billion cubic feet in 2026) and downward pressure on Henry Hub prices, revised to $3.40 per million British thermal units (MMBtu) in 2025 and $3.90/MMBtu in 2026.
Implications for the Energy Sector
The EIA’s outlook signals a period of stability in U.S. production but underscores vulnerabilities to global price fluctuations and economic factors, such as China’s oil purchasing pace, which could influence upward price risks.
For the Permian and Gulf in oil, and Appalachia, Permian, and Haynesville in gas, these regions will remain critical to meeting domestic and export demands. As the U.S. continues to lead non-OPEC+ supply growth, stakeholders should monitor drilling efficiencies and policy shifts that could alter these trajectories.
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