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U.S. oil production will decline for the first time next year, according to government forecasts that cast new doubts on Donald Trump’s “energy control” agenda.
The Energy Information Agency, the energy sector division, said on Tuesday that U.S. oil production will fall from a record high of 13.5 million barrels a day to around 13.3mn barrels by the end of next year.
“With fewer active drilling rigs, we expect US operators to drill and complete wells until 2026,” the EIA said in its monthly report issued Tuesday. Active Rig said in a previous report that it had “a much lower” than expected.
The pessimistic official prediction comes just months after Trump was re-elected after a presidential election in which he vowed to “unleash” American drilling, promote oil production and lower energy prices.
The surge in shale production over the past 20 years has made the US the world’s largest producer of oil and gas, giving domestic industries a stable and inexpensive energy flow, while keeping the global commodity market aside.
Annual production last declined in 2021 during the Covid-19 pandemic in Trump’s first term, but recovered as crude prices rose during Joe Biden’s administration.
The new government’s forecast, reflecting forecasts from Shale executives, highlights the stress the sector is facing, saying it is becoming unsettled that fears about increased supply from the OPEC+ cartel and the impact of Trump’s trade war on the global economy are pushing down oil prices.
The tariffs on Trump’s steel and aluminum imports have also increased the costs of steel and other important inputs in the oil sector, narrowing the margins of excavators, executives say.
Oilfield Services company Baker Hughes said last week that the number of oil rigs operated in the US fell to 442, with nine and 50 in a week lower than a year ago.
The U.S. oil benchmark West Texas intermediate settled at $64.98 a barrel per barrel on Tuesday, down 17% from this year’s high. The EIA said international oil prices will fall below $60 in 2026.
“The current administration is causing a lot of disruption. I’m really worried about not having a plan,” Wilvan Law director of private equity firm Quantum Capital Group, one of Shalepatch’s biggest investors, told the Energy Capital Conference in Houston last week.
Some analysts expect us to fall more sharply in the coming months. S&P Global Commodity Insights said this week that total production could fall 640,000 b/d from mid-2025 to the end of next year.
