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U.S. Oil Production On Course To Hit Record Levels In 2023

U.S. oil production fell sharply in 2020, but the Energy Information Administration is expecting it to pick back up and even set new records in just two years, it said in its much-anticipated annual energy outlook (AEO2021).

According to the EIA, U.S. oil production will surpass in 2023 its previous annual average of 12.25 million barrels per day, achieved in 2019.

In 2020, U.S. oil production had reached a high of 13.1 million bpd on average for week ending March 13. But the overall annual average for the pandemic year was much lower after oil production fell sharply in August, briefly dipping below 10 million barrels per day.

U.S. energy consumption, however, will take years to return to 2019 levels—eight years to be exact. The EIA notes, however, that “that projection is highly dependent on the pace of U.S. economic recovery.”

Electricity demand, according to the AEO2021, is expected to return to 2019 levels by 2025—again, a slower recovery than U.S. oil production, which also has export markets to draw on.

Related: China’s Oil Storage Levels Are Falling In Early 2021

That U.S. production could return to 2019 levels is remarkable, considering that domestic consumption will take years longer to recover.

Currently, U.S. oil production, according to the EIA is averaging 10.9 million barrels per day—2.2 million bpd lower than the highs reached in March of 2020.

The number of active drilling rigs is on an upward trajectory, but overall, the number of active drilling rigs is still 400 below where it was just one year ago today.


Meanwhile, OPEC’s production is also down by millions of barrels per day from 2019 levels as part of its coordinated production cuts.

By Julianne Geiger for Oilprice.com

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  • rudolf d'Ecofacista on February 04 2021 said:
    hahahahahahahahahaha..I am pissing myself...record US oil production by 2023 while it will take 8 years to reach 2019 oil consumption in the US...what else ...cars running on thin air while production gold as a waste product by march 2022?
  • Mamdouh Salameh on February 04 2021 said:
    The US Energy Information Administration (EIA) is resuming its hype after a period of silence in 2020 when US shale oil production took a real battering as a result of the COVID-19 pandemic losing 6.38 million barrels a day (mbd) according to various expert accounts. Yet, the EIA has owned up very grudgingly and piecemeal to only 3 mbd.

    Therefore, it is pure hype for EIA to expect US oil production to surpass in 2023 the claimed previous annual average of 12.25 mbd achieved in 2019. Many observers and experts believe the figure of 12.25 mbd to be very highly inflated.

    The pivotal fact for US shale oil production is that its fate is now in the hands of OPEC+. If it decides to increase production or end its production cuts for any reason, prices will fall and this will immediately and very adversely impact on shale oil production.

    Still, with rising crude oil prices, the overwhelming majority of US shale oil drillers have two courses of action in coming years.

    The first course is to go back to their pre-pandemic work ethics which were characterized by greed and irresponsible production aimed at undermining OPEC+ efforts to prop oil prices and also gain market share at its expense. But that approach has led to increasing numbers of bankruptcies and mounting debts estimated at hundreds of billions of dollars. It also That ended in a decisive victory for OPEC+ over US shale oil.

    The alternative course of action is for shale oil drillers to produce responsibly. OPEC+ recent production cuts have extended a lifeline for shale drillers who are struggling under the weight of the new pandemic world order. Let’s hope that this time they have learnt the lesson of not to undermine OPEC+ efforts and work on the fair principle of live and let live.

    With increasing number of bankruptcies and with shareholders wanting returns on their investments, not more barrels of oil, and banks wanting their loans repaid, US shale oil production will neither have any prospect of growth nor a comeback soon to previous levels. It hasn’t only lost a sizeable production as a result of the pandemic but also its importance to the global oil market.

    Oil prices above $50 a barrel will put to the test shale oil drillers’ resolve to boost returns to shareholders and not sink all the cash into drilling. Investors may not give the industry another chance.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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