The US is expected to boost its crude oil production to an average of 13.7 million barrels per day (B/D) in 2025, marking an increase of about 500,000 B/D from this year’s projected average.
This forecast comes from the latest short-term energy outlook report by the US Energy Information Administration (EIA).
The report notes that this growth is anticipated despite a decrease in the number of active drilling rigs across the US. The Permian Basin, which spans Texas and New Mexico, continues to drive this increase in production. The Permian is currently home to nearly twice as many rigs as the rest of the Lower 48 states combined—313 rigs compared to 165 elsewhere. At the start of 2023, these numbers were 352 and 242, respectively.
EIA data reveals that new wells in the Permian Basin were producing a combined 433,000 B/D in their first month of operation as of July. This production is sufficient to offset declines from older wells.
Natural gas production in the Permian follows a similar trend, with new wells producing 780,000 million standard cubic feet per day (MMscf/D) in their first month.
The EIA attributes this growth to advanced drilling techniques in the Permian, including longer lateral lengths, optimized well spacing, and improved fracturing designs. The forecast suggests a 430,000 B/D increase in Permian oil production from 2023 levels, reaching 6.3 million B/D by the end of this year. Further gains are expected, with Permian output projected to rise by another 300,000 B/D in 2025.
In terms of natural gas, the EIA predicts a rise of 1.9 billion cubic feet per day (Bcf/D) this year and an additional 1.0 Bcf/D next year, bringing the region’s total to 25.8 Bcf/D, or 23% of all US gas output. The Permian is closing in on the top gas-producing region in the US, the Appalachian Basin, which is experiencing a slight decline toward 34.7 Bcf/D. The Permian is set to add 2.4 Bcf/D, while Appalachian gas production has decreased by 2.0 Bcf/D since the end of 2023.
The EIA points out that the rise in Permian gas is largely due to increased associated gas from the basin’s oil wells. The report expects crude oil prices to remain high enough to support growth in both crude oil and associated natural gas production.
The EIA also notes that there are few obstacles to achieving these projections. Several takeaway projects are in various stages of development, including a new Enbridge-operated pipeline with a capacity of 120,000 B/D set to come online next year. Additionally, the Matterhorn Express pipeline, which will transport up to 2.5 Bcf/D of Permian gas to the Houston area, is expected to begin operation later this year.
Projections for the other major US oil basins show mixed trends. The Eagle Ford Shale in south Texas is expected to see production decrease from 1.16 million B/D in 2023 to 1.1 million B/D in 2024, a 5% drop. However, production may increase by 4.5% in 2025, reaching 1.15 million B/D.
North Dakota’s Bakken Shale is seeing a rebound, with oil production rising nearly 5% from 2023 to an average of 1.28 million B/D in 2024. This figure may grow another 3% to 1.32 million B/D in 2025.
The Federal Gulf of Mexico is projected to experience a mixed trend, with production declining by 3.7% from 1.87 million B/D in 2023 to 1.8 million B/D in 2024. However, a recovery of 2.8% to 1.85 million B/D is anticipated in 2025.