U.S. Oil Production Still has Growth Potential
Crude oil production in the United States is booming, reports Poten & Partners in its weekly opinion.
According to the U.S. Energy Information Administration, U.S. Field Production of Crude Oil reached 13.8 Million barrels per day (Mb/d) in September 2025, a remarkable recovery since bottoming out in 2008 below 5 Mb/d.
The shale oil boom was primarily responsible for this turnaround. The decision to allow crude oil exports from the U.S. at the end of 2015 also contributed, because it made U.S. crude accessible to the international market. This export access converged U.S. oil prices with global benchmarks, narrowing Brent - WTI spreads and boosting domestic production.
Over the last 10-15 years, shale production in the U.S. has increased rapidly, both in real terms, and as a percentage of total U.S. production. In October 2025, shale output reached 9.04 Mb/d, representing 65% of total U.S. production. As shale production expanded, U.S. crude oil exports followed suit.
At the end of 2015, just before the overall ban was lifted, exports were below 500 Kb/d. Since 2023, exports have averaged above 4.0 Mb/d. However, the rapid growth in shale production seems to have leveled off, and export growth has slowed this year as well. Which begs the question: Are we at peak U.S. production (and exports)?
To answer the question, we will not only look at shale oil, but also at conventional onshore production as well as offshore U.S. Gulf output. Shale oil has been the engine of U.S. production growth, but over the years there have been ups and downs, driven by external factors (Covid, oil prices, OPEC policies) and changes within the industry. Over time, the shale industry has successfully weathered the storms of low oil prices and demand challenges. Companies have become more efficient, eking out productivity gains from technological advancements like longer lateral wells, enhanced hydraulic fracturing, and digital tools, enabling higher output despite fewer active rigs.
Over the last five years, the industry has also consolidated through merger and acquisitions. Large companies, such as ExxonMobil and Chevron, have acquired smaller independents, and the attention has shifted to shareholder returns rather than growth at all cost. This has reduced production growth, especially in a lower oil price environment.
However, don’t count out shale just yet. As one shale CEO said in a letter to his shareholders: “Never underestimate the American engineer”. Drilling technology continues to improve, and companies keep finding ways to reduce break-even costs. One of the biggest potential advances in shale production could come from increasing the recovery rate. The recovery percentage of shale oil in the U.S. typically ranges from about 5% to 15% of the original oil in place, depending on the specific technology and formation characteristics.
The CEO of Chevron recently emphasized that the next phase of the shale revolution is to increase the recovery rate. Every 1%-point increase in the recovery rate is worth billions and according to Chevron: “We know where the oil is. If we left 90% of the oil behind, it would be the first time in history that we didn't figure out how to do it”.
Shale is not the only area where the U.S. oil industry sees potential. Oil production in the deepwater U.S. Gulf is also on the upswing. Production in the “Gulf of America” is close to 2.0 Mb/d and deepwater startups in 2025 are forecast to push production from this area to 2.2 Mb/d in 2026 (an all-time high). Further growth is expected in 2027.
Another area that has significant growth potential is Alaska. In their most recent Short-Term Energy Outlook, the EIA forecasts that crude oil produced from Alaska will reach 477,000 b/d in 2026, a 13% (55,000 b/d) increase from 2025. This is the largest annual increase since the 1980s. Over the next decade, several new projects will come online, boosting production further. Alaska’s Department of Revenue anticipates a long-term peak of more than 650,000 b/d by 2034.
While there is production growth expected in many places, U.S. oil demand is expected to plateau, making more oil available for export. It is possible that in the next two years one of the proposed deepwater oil exports terminals in the U.S. Gulf will start operations, reducing the need for ship to ship lightering. This would expand U.S. crude oil export capacity as well as make it more efficient.
U.S. crude oil exports will likely support the tanker market for years to come.