US crude oil production is set to decline in 2026 for the first time since 2021, according to a government forecast released Tuesday.
The US Energy Information Administration (EIA) now projects output will dip to 13.37 million barrels per day (bpd) in 2026, down from 13.42 million bpd expected in 2025 – a downward revision of 120,000 bpd from the agency’s previous outlook published in May.
The revised forecast comes as shale producers signal that US oil output may have already peaked amid lower prices and fewer active drilling rigs.
The EIA expects US shale production to fall to 11.09 million bpd next year, compared to a previous estimate of 11.25 million bpd. The decline is largely driven by a slowdown in the prolific Permian Basin, the country’s top oil-producing region.
Fewer rigs are expected to be deployed through 2026, reducing the number of wells drilled and completed, the agency said. US oil rigs have already dropped to the lowest levels in nearly four years as producers brace for softer global demand.
The EIA also trimmed its outlook for global oil demand growth this year. Consumption is now forecast to rise by 800,000 bpd to 103.5 million bpd, down from a previous estimate of 1 million bpd.
Meanwhile, the agency warned of a growing supply surplus, projecting an inventory buildup of more than 800,000 bpd in 2025 – the largest increase since the EIA began publishing estimates for that year in early 2024.