The 2026 Short-Term Energy Outlook from the US Energy Information Administration (EIA) forecasts that US crude oil production next year will remain near the record 13.6 million B/D produced in 2025 before decreasing 2% to 13.3 million B/D in 2027. The predicted drop in annual US production would mark the first drop since 2021.
The EIA forecasts that slight production growth from the Gulf of Mexico, which it calls the Federal Gulf of America, and Alaska will be offset by declines in the lower 48 states in the next 2 years as low oil prices reduce operators’ incentives to drill. The EIA said it expects the slowdown in drilling activity will outpace recent increases in drilling productivity that have bolstered US production.
The US set an annual production record in 2025, led by increases from the Permian region in western Texas and southeastern New Mexico and, to a lesser extent, offshore production increases in the Gulf of Mexico. In 2025, the Permian region alone accounted for almost half of total US crude oil production.
The EIA said that much of its crude forecast hinges on domestic oil prices, especially for onshore production. The EIA predicts that the price of West Texas Intermediate crude will fall from its 2025 average of $65/bbl to $52/bbl in 2026 and to $50/bbl in 2027. These prices are lower than recent breakeven production prices. Oil industry executives responding to the Dallas Fed Energy survey said the two largest basins in the Permian, the Midland and Delaware basins, had breakeven prices of $61/bbl and $62/bbl, respectively.
The EIA said it expects little change in production from the Permian region as rig activity declines along with falling prices. It forecasts Permian production will remain essentially the same as its 2025 average of 6.6 million B/D in 2026 before falling slightly to 6.5 million B/D in 2027.
It forecasts that oil production in the Gulf of Mexico will rise from 1.9 million B/D in 2025 to 2.0 million B/D in 2026 as new fields offset declines from existing fields. Those levels would be records for gulf production. The EIA said it expects gulf production will decline slightly in 2027 because of natural field declines.
In Alaska, the EIA said it expects production to increase through 2027 as the new Nuna and Pikka projects contribute to overall growth. It forecasts production will rise from 0.4 million B/D in 2025 to 0.5 million B/D in 2027. That annual production increase would be the first since 2017 and the largest since 2002.