U.S. crude oil production is expected to fall from a record 13.5 million barrels per day (bpd) in the second quarter of 2025 to about 13.3 million bpd by the end of 2026, the U.S. Energy Information Administration (EIA) revealed in its June Short-Term Energy Outlook. This signals a major shift for the shale industry, suggesting its peak output may already be behind it.
This forecast marks the first sustained production decline since the shale boom began over a decade ago. The drop is driven by a sharp fall in active drilling rigs and weaker oil prices.
Rig activity has plunged unexpectedly. The rig count recently hit 442—the lowest since November 2021—according to Baker Hughes. In the Permian Basin, the heart of U.S. shale, rig numbers are down to levels not seen since late 2021.
The EIA now expects fewer wells will be drilled and completed through 2026. Annual production is projected to plateau, averaging 13.42 million bpd in 2025 and 13.37 million bpd in 2026. For now, the days of steady year-on-year growth appear over.
Adding to the cautious outlook, the EIA forecasts Brent crude prices to average $59 per barrel in 2026, down from $66 this year. Lower prices and a focus on capital discipline are causing producers to delay aggressive drilling.
Key points from the EIA forecast include:
- U.S. production growth is hitting a ceiling as rig declines outweigh productivity gains.
- With smaller supply buffers, oil markets could face more volatility from geopolitical events.
- Producers are expected to prioritize shareholder returns over increasing output.
- The U.S. shale sector may no longer be the unstoppable growth engine it once was.
This outlook marks a significant turning point. If correct, 13.5 million bpd will stand as the peak for U.S. shale production. The era of relentless growth is giving way to a plateau or gradual decline, depending on prices, policies, and drilling activity. For now, the EIA is sending a clear message: the peak of U.S. shale oil may already be past.
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