New Mexico, Gulf Lift U.S. Oil Production

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)

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Summary

U.S. data to September show net crude oil production set a record. By next year, however, offshore production is the only source of meaningful growth.

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September Levels Set a Record

New Mexico and offshore crude oil production helped U.S. levels reach a new high, federal data to September show.

The pace of annual growth in U.S. crude oil production is slowing down, if not declining. The U.S. Energy Information Administration (EIA) expects total U.S. crude oil production to show an average of 13.59 million barrels per day (BBL/d) for 2025. If accurate, that would be a 2.7% increase from the 2024 average.

By next year, the average drops to 13.58 million BBL/d, with the U.S. shale basins accounting for nearly all the decline.

Data to September, however, show that U.S. oil production is still performing well. On Friday, EIA published statistics showing production averaged 13.84 million BBL/d, an all-time high. New Mexico, the second-largest crude oil producer by volume after Texas, posted a record at 2.35 million BBL/d, while offshore reached its highest level since February 2020 at 1.98 million BBL/d.

Records were set previously this year in both June and July. Both times, it was New Mexico and offshore supporting most of the gains. The Permian Basin, which straddles the border between New Mexico and Texas, is starting to yield more natural gas as the reservoir matures, though it is one of the few shale basins to show an increase in crude oil production next year.

Helmerich & Payne Incorporated (Tulsa, Oklahoma) among the more active U.S. drilling contractors, is investing heavily in longer laterals. Its drilling program in the Sprayberry Field, near the heart of the Permian Basin, added about 100 new wells so far in 2025.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can learn more about the Sprayberry development--including capacities, investment values and necessary equipment--from a detailed project report.

By the numbers

• $51.26 for WTI next year
• 1.97 million BBL/d expected from offshore next year
• 13.84 million BBL/d new record for U.S. production

Production Should Decline by Next Year

Extended laterals, however, tend to have a high rate of decline. The EIA said recently that more would be needed just to sustain production. Meanwhile, in terms of percentage, it is the waters off the southern Gulf Coast that should yield the largest increase in new oil by next year. By 2026, the federal waters off the Gulf Coast should yield 1.97 million BBL/d, a 3.1% increase from the average expected for this year.

Despite vocal and political support for fossil fuels from President Donald Trump's administration, the sector is facing substantial headwinds due in part to his trade policies.

On Monday, the day after a long, four-day U.S. holiday period, crude oil prices were on the rise. West Texas Intermediate (WTI), the U.S. benchmark for the price of crude oil, was trading near $59 per barrel early in the trading session. Apart from mounting tensions between the United States and oil-rich Venezuela, the Reuters news service reported that the Caspian Pipeline Consortium, a major artery carrying oil from Kazakhstan, issued a notice of a drone attack.

By next year, the EIA expects WTI to average $51.26 per barrel, well below the point at which many U.S. shale drillers can make a profit. Discounting 2019 and 2020 to take the COVID-19 pandemic into account, it was 2015 the last time crude oil prices were that low.

Key Takeaways

• New Mexico and offshore production help set a record in September
• By next year, offshore is the only source of meaningful growth
• Records were already set in June and July

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