(WO) – U.S. crude oil production is expected to remain near its 2025 record through next year before declining in 2027, as lower oil prices curb drilling activity in the Lower 48, according to the U.S. Energy Information Administration’s January 2026 Short-Term Energy Outlook.
The EIA forecasts U.S. crude oil production will average about 13.6 MMbpd in 2026—essentially flat with the record level reached in 2025—before falling roughly 2% to 13.3 MMbpd in 2027. If realized, the decline would mark the first annual drop in U.S. crude production since 2021.
Production gains in the Federal Gulf of America and Alaska are expected to partially offset declines in the Lower 48, where lower crude prices are reducing operators’ incentives to drill. The EIA said the slowdown in drilling activity is expected to outpace recent gains in drilling productivity that have supported U.S. output in recent years.
The Permian basin, which accounted for nearly half of total U.S. crude oil production in 2025, is projected to see limited growth. Permian production is forecast to average about 6.6 MMbpd in 2026, essentially unchanged from 2025, before slipping slightly to 6.5 MMbpd in 2027 as rig activity declines. The EIA noted that falling prices are approaching or dropping below reported breakeven levels in the basin.
West Texas Intermediate crude oil prices are forecast to average $52/bbl in 2026 and $50/bbl in 2027, down from a 2025 average of $65/bbl. Recent surveys indicate breakeven prices in the Permian Basin remain in the low-$60/bbl range.
Offshore production in the Gulf of America is expected to increase from 1.9 MMbpd in 2025 to about 2.0 MMbpd in 2026 as new developments offset natural declines from existing fields. If achieved, the forecast would represent record production for the region. Gulf output is projected to edge lower in 2027 as field declines resume.
Alaska production is forecast to rise through 2027 following decades of decline, supported by new projects including Nuna and Pikka. The EIA expects Alaska output to increase from about 0.4 MMbpd in 2025 to roughly 0.5 MMbpd in 2027, marking the first sustained growth in Alaska production since 2017.
