US oil production is projected to reach its highest level ever at 14 million barrels per day (mbbl/d) in 2027, maintaining this plateau until the end of the decade before entering a period of sustained decline, according to the latest Annual Energy Outlook from the US Energy Information Administration (EIA).
This marks a pivotal moment for the world’s largest oil producer, signalling the impending end of the nearly two-decade US shale boom.
The EIA forecasts that after 2027, US output will gradually fall, reaching approximately 11.3 mbbl/d by 2050.
Current production stands at around 13.7 mbbl/d, underscoring the scale of the anticipated decline.
The agency also projects that US shale oil production will peak at 10 mbbl/d in 2027 — up from 9.69 mbbl/d this year — before dropping to 9.33 mbbl/d by 2050.
The report suggests that the trajectory of US oil production has been shaped by policy decisions from both recent administrations.
The Department of Energy (DOE) attributed the projected decline to the policies of former President Joe Biden, stating they have set a “disastrous path” for US energy production.
However, the DOE also noted that the issuance of drilling permits accelerated under Biden compared to Trump’s first term, as reported by Reuters.
The International Energy Agency (IEA) highlighted the impact of President Donald Trump’s tariffs on trading partners, which have increased costs for shale drillers and contributed to downward revisions in US output forecasts for 2025.
The IEA also predicts that global oil demand growth will slow, with US production tapering due to these tariffs and retaliatory moves from trading partners.
US oil demand, which rebounded after the pandemic, is expected to stabilise next year.
The EIA projects a slight increase from 20.51 mbbl/d this year to 20.52 mbbl/d in 2026.
For context, pre-pandemic US oil consumption averaged 20.54 mbbl/d in 2019, with the all-time high set in 2005 at 20.80 mbbl/d.
The EIA has revised its global oil demand growth forecasts downward, citing weaker economic activity driven by trade tensions between the US and China.
Brent crude is now expected to average US$67.87 per barrel this year, down from an earlier forecast of US$74.22/bbl, while US benchmark West Texas Intermediate (WTI) is forecasted to average US$63.88/bbl in 2025, nearly US$7 below the prior forecast.
On Tuesday, Brent futures traded just below US$65/bbl, down around 13 per cent year-to-date, and WTI hovered at US$61.25/bbl, down about 14 per cent.
The IEA reported a sharp cut in world oil demand growth this year, projecting a rise of 730,000 barrels per day (bpd), down from the previous forecast of 1.03 mbbl/d.
“The deteriorating outlook for the global economy amid the sudden sharp escalation in trade tensions has prompted a downgrade to our forecast for oil demand growth this year,” the IEA stated.
In 2026, the agency predicts a further slowdown in demand growth to 690,000 bpd, citing economic fragility and increased electric vehicle adoption.
The EIA’s projections underscore a critical juncture for the US oil industry.
While record-setting production was achieved during Biden’s tenure in 2023 and 2024, and drilling permits increased, the combined effects of policy shifts and global economic headwinds are expected to reshape the sector’s future.
As the US approaches its production peak, industry stakeholders and policymakers face mounting pressure to navigate the transition and ensure energy security amid evolving market dynamics.