The U.S. Energy Information Administration (EIA) announced on Tuesday that U.S. oil production is expected to reach new heights in 2025, surpassing previous estimates, while maintaining its projections for demand growth in its latest Short-Term Energy Outlook report.
Key Highlights:
Production Forecast:
The EIA now anticipates U.S. crude oil production will average 13.59 million barrels per day (bpd) in 2025, up from a prior estimate of 13.55 million bpd.
Consumption Estimates:
U.S. consumption of petroleum and liquid fuels is projected to remain steady at 20.5 million bpd in 2025.
Market Dynamics:
President Donald Trump has pledged to maximize U.S. oil production, despite energy executives focusing on capital discipline.
Brent crude prices are expected to average around $74 in 2025, with a decline to approximately $66 in 2026, reflecting gradual production increases alongside weak global demand growth.
OPEC+ Influence:
OPEC+ production cuts are anticipated to reduce global oil inventories, helping to stabilize crude oil prices near current levels through the first quarter of 2025.
Global liquid fuels production is projected to rise by 1.7 million bpd in 2025, with about 100,000 bpd from OPEC+ producers. The group plans to increase production by 600,000 bpd in 2026 as they unwind voluntary cuts.
Output Growth:
Growth in oil output outside of OPEC+ will primarily come from the U.S., Canada, Brazil, and Guyana through 2026.
Global Consumption Trends:
Global liquid fuels consumption is expected to increase by 1.4 million bpd in 2025 and 1 million bpd in 2026, driven mainly by demand from India and China. However, this growth remains slower than pre-pandemic trends.
Tariff Implications:
The EIA does not foresee any future tariffs imposed by Trump on Canada and Mexico significantly affecting global oil supply. However, tariffs and new U.S. sanctions on Russia present uncertainties for future oil prices.
Refinery Utilization:
U.S. refinery utilization is expected to remain high, but net U.S. fuel exports will decrease to meet domestic demand, particularly following the closure of two U.S. refineries.