EIA Forecasts First Decline in US Oil Production Since 2021

EIA Forecasts First Decline in US Oil Production Since 2021

EIA Cuts 2026 Production Outlook Amid Sluggish Drilling Activity

The US Energy Information Administration (EIA), in its latest Short-Term Energy Outlook, forecasts a year-on-year decline of 50,000 barrels per day (b/d) in US oil production for 2026, bringing total output down to 13.37 million b/d. This would mark the first annual decrease in US oil output since 2021, when the Covid-19 pandemic significantly disrupted operations.

While 2025 oil production growth is still projected at 210,000 b/d YoY, the outlook for 2026 reflects a broader slowdown in upstream activity, particularly in shale regions, where reduced rig counts and capital discipline have started to impact output projections.

Why Is US Oil Production Set to Decline?

The EIA attributes the revised 2026 projection to the recent drop in drilling activity, which has been apparent across major basins. While global oil demand remains robust, US producers have been more cautious, focusing on capital efficiency over aggressive expansion.

This production outlook could influence global oil prices, supply chain dynamics, and OPEC+ decisions, especially as market participants factor in slowing US output growth.

Implications for Energy Markets

• First US production decline since 2021
• Reflects a broader trend of capital discipline in shale
• May support crude oil prices in medium term
• Could impact oil-exporting countries' strategies

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