The United States is on track to break yet another oil production record this year, but the Energy Information Administration (EIA) says the resulting supply glut could drag prices lower in the months ahead.
In its October outlook, the EIA raised its forecast for U.S. crude production to 13.53 million barrels per day (bpd) for 2025, up from a forecast of 13.44 million bpd previously. That’s well above last year’s record 13.23 million bpd and reflects stronger-than-expected output in July, along with faster ramp-ups from new offshore Gulf of Mexico projects. The Gulf region alone is now expected to average 1.89 million bpd this year, a 50,000-barrel increase from prior forecasts as several developments came online earlier than anticipated.
The EIA said that while record production will keep global markets well supplied, it also risks tipping the balance toward surplus. “We expect global oil inventories to rise through 2026, putting significant downward pressure on oil prices in the coming months,” the agency warned in its report. It expects West Texas Intermediate crude to average about $65 per barrel this year—roughly 15% below 2024 levels—while Brent is projected to average $68.64.
The new forecast shows U.S. crude output reached 13.2 million bpd in 2024, led by growth in the Permian Basin and the Gulf of Mexico. But the EIA has noted that growth has slowed compared with the million-barrel annual surges seen during the peak shale years, suggesting U.S. producers are nearing the top of their capacity gains.
The agency also assumes that only part of OPEC+’s planned production hikes will materialize due to limited spare capacity among members. Even so, inventories are expected to rise by an average of 2.1 million bpd in the fourth quarter of 2025—enough to keep supply comfortably ahead of demand and pressure prices further.
If those barrels flood the market too quickly, the next big oil problem may not be scarcity—it’ll be surplus.
By Julianne Geiger for Oilprice.com
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