EIA Sees USA Crude Oil Production Dropping in 2026, 2027

In its latest short term energy outlook (STEO), which was released on January 13, the U.S. Energy Information Administration (EIA) projected that total U.S. crude oil production will drop in 2026 and 2027.

According to this STEO, the EIA sees U.S. crude oil output, including lease condensate, averaging 13.59 million barrels per day in 2026 and 13.25 million barrels per day in 2027. This production averaged 13.61 million barrels per day in 2025, the STEO showed.

The STEO projected that Lower 48 States production, excluding the Gulf of America, will come in at 11.11 million barrels per day in 2026 and 10.87 million barrels per day in 2027. In the report, Federal Gulf of America production is forecast to average 2.00 million barrels per day in 2026 and 1.89 million barrels per day in 2027 and Alaska output is projected to come in at 0.47 million barrels per day in 2026 and 0.50 million barrels per day in 2027.

In 2025, Lower 48 States production averaged 11.28 million barrels per day, Federal Gulf of America production came in at 1.91 million barrels per day, and Alaska output averaged 0.42 million barrels per day, the STEO showed.

A quarterly breakdown included in the EIA’s latest STEO projected that U.S. crude oil production will come in at 13.73 million barrels per day in the first quarter of this year, 13.65 million barrels per day in the second quarter, 13.47 million barrels per day in the third quarter, 13.50 million barrels per day in the fourth quarter, 13.43 million barrels per day in the first quarter of 2027, 13.31 million barrels per day in the second quarter, and 13.13 million barrels per day across the third and fourth quarter of next year.

“We forecast U.S. crude oil production will remain close to the 2025 average on an annual basis in 2026 before falling by 340,000 barrels per day in 2027,” the EIA said in its latest STEO.

“Although there were 13 percent fewer rigs drilling for oil in the United States at the end of 2025 than there were at the beginning of the year, according to Baker Hughes, production reached a record high last year as rising well-level productivity outweighed this drop,” the EIA added.

“Over the next two years, we expect sustained lower crude oil prices will result in a pullback in drilling and completion activity that is enough to outweigh ongoing increases in productivity,” it continued.

“We estimate U.S. crude oil production set a new record of 13.6 million barrels per day in 2025. We forecast total crude oil production will average about 13.6 million barrels per day again this year. In 2027, we expect production to decrease to 13.3 million barrels per day, down two percent from our forecast for 2026,” the EIA went on to state.

In its latest STEO, the EIA highlighted that, in January, it “introduced improvements” to its “historical crude oil and natural gas estimates of regional production breakouts in the short term energy outlook”.

“As a result, we have reallocated some historical estimates of crude oil production among the regions going back to the beginning of 2024. The most notable among these changes is that we allocated about 30,000 barrels per day of crude oil to the Permian region that was formerly part of the Rest of Lower 48 States region,” it pointed out.

“In years prior, the Permian basin was the largest contributor to overall U.S. crude oil production growth. In 2026, however, we estimate annual production growth for the Permian basin will remain largely unchanged,” the EIA added.

The organization stated in its January STEO that decreasing crude oil prices have contributed to falling rig counts.

“With fewer rigs drilling in the Permian, production growth has primarily come from increasing production efficiency out of maturing wells,” the EIA said.

“This dynamic is even more pronounced in tight oil regions outside of the Permian. In 2026, we expect productivity improvements will continue but be offset by declining rig activity, particularly later in the year as the impact of low crude oil prices on drilling activity becomes more apparent as WTI prices fall below $50 per barrel in 4Q26,” it added.

“In 2027, we expect Permian production to decrease by one percent on an annual basis, reflecting the full impact of the crude oil price decline on drilling activity,” it noted.

“Overall, we expect onshore production in the Lower 48 states will fall by 170,000 barrels per day this year. This drop is partly offset by production growth of 50,000 barrels per day in Alaska and 90,000 barrels per day in offshore Gulf of America,” the EIA continued.

The organization stated that production growth in Alaska and the Gulf of America is driven by several new projects that are set to come online this year.

“In 2027, we forecast crude oil production declines will accelerate,” the EIA went on to note in its January STEO.

“Outside of the Permian, we expect declines in onshore production in the rest of the Lower 48 states will continue. Offshore GOA production also declines next year, unlike in 2026,” it added.

“Offshore projects like those in the GOA are larger, more capital-intensive projects that require longer startup timelines before beginning production. The reduction of new projects expected to begin production in 2027 therefore contributes to the expected fall in production in 2027 due to natural decline rates,” the EIA went on to state.

Rigzone has contacted the American Petroleum Institute (API) and the U.S. Department of Energy (DOE) for comment on the EIA’s latest STEO. At the time of writing, neither have responded to Rigzone.

A data page on the EIA website displaying monthly U.S. field production of crude oil – which was last updated on December 31, 2025, and includes data from January 1920 to October 2025 – showed that monthly U.S. field production of crude oil averaged 13.870 million barrels per day in October last year.

This figure is the highest in the data set, with the second highest figure coming in September 2025, at 13.839 million barrels per day, and the third highest figure coming in August 2025, at 13.810 million barrels per day.

Monthly U.S. field production of crude oil has averaged 13 million barrels per day or more on 25 occasions, according to the data page. Ten of these were seen in 2025, 11 came in 2024, and four came in 2023, the data page highlighted.

A data page on the EIA site showing annual U.S. field production of crude oil – which was also last updated on December 31, 2025, and which includes data from 1859 to 2024 – showed that annual U.S. field production of crude oil averaged 13.235 million barrels per day in 2024. Prior to this, annual U.S. field production of crude oil had never averaged 13 million barrels per day or more, the data revealed. The closest it came to an annual average of 13 million barrels per day was in 2023, at 12.943 million barrels per day, the data showed.

In its STEO, the EIA described itself as the statistical and analytical agency within the U.S. DOE. The EIA stated in the STEO that, “by law”, its “data, analyses, and forecasts are independent of approval by any other officer or employee of the U.S. Government” and added that “the views in this report do not represent those of DOE or any other federal agencies”.

On its website, the API notes that it represents all segments of America’s natural gas and oil industry, adding that its approximately 600 members “produce, process and distribute the majority of the nation’s energy”.

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