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Key Points

The US faces a sharper decline in crude oil production through 2026 than previously expected, according to S&P Global. Global demand growth is projected to hit a 23-year low outside crisis periods, exacerbating the supply glut. OPEC+'s decision to unwind production cuts further pressures prices, with Brent crude potentially dropping below $50. Analysts warn the US market will feel the strongest impact from these shifting dynamics.

Key Points: US Crude Oil Production Faces Steeper 2025 Decline S&P Warns

  • US crude output decline steeper than earlier forecasts
  • Global demand growth weakest since 2001 ex-crises
  • OPEC+ production cuts accelerate market surplus
  • Brent prices may drop to mid-$60s or lower
3 min read

US faces steeper crude oil production decline than previously anticipated: S&P Global Commodity Insights

S&P Global predicts sharper US oil output drop in 2025-26 amid global surplus, with Brent prices potentially falling below $50 per barrel.

"The oil price is currently defenseless... eventually there will be too much crude oil in the market - Jim Burkhard, S&P Global"

New Delhi, June 11

The US is facing a deceleration of crude oil production growth in 2025 than previously anticipated, according to a new analysis by S&P Global Commodity Insights.

New Delhi [India], June 11 (ANI): The US is facing a deceleration of crude oil production growth in 2025 than previously anticipated, according to a new analysis by S&P Global Commodity Insights.

The global commodities information services provider projects a sharper year-on-year overall production decline in 2026 in the US than previously anticipated.

The latest S&P Global Commodity Insights Global Crude Oil Markets Short-term Outlook finds that the US, which has been the biggest source of global supply growth in recent years, will be "disproportionately impacted" by a combination of sluggish global oil demand growth and supply surplus.

Following the most recent decision by OPEC+ members to proceed with the accelerated unwinding of production cuts, along with supply growth elsewhere, year-on-year global crude oil (and condensate) production growth is expected to be 2.2 million barrels per day for the second half of 2025, compared to just 390,000 barrels per day of expected crude oil demand growth.

S&P Global Commodity Insights said that annual global total oil (liquids) demand growth for 2025 is expected to be the weakest since 2001, excluding the economic downturn during the 2008-09 financial crisis and the COVID-19 pandemic in 2020, averaging 770,000 barrels per day.

The S&P report has revised down the crude oil price outlook, with Dated Brent ranging from the mid-USD 60s per barrel to USD 50 per barrel or below for a time (low USD 60-upper USD 40s for WTI).

Jim Burkhard, Vice President and Global Head of Crude Oil Research, S&P Global Commodity Insights, states, "The oil price is currently defenseless. Seasonal demand in the northern hemisphere summer may obscure the impact for a bit, but eventually there will be too much crude oil in the market absent a change in production trends."

The report asserted that the US is expected to bear the brunt of the impacts from an oversupplied market compared to other sources of non-OPEC supply, such as Canada, Guyana, and Brazil.

"The United States has been the biggest source of supply growth in recent years and a factor in OPEC+ supply restraint. Signs of weak U.S. crude supply growth and decline could begin to alter oil market psychology. However, much will still depend on the future course of OPEC+ production and oil demand," said Ian Stewart, Associate Director, S&P Global Commodity Insights.

- ANI

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Reader Comments

Here are 6 diverse Indian perspective comments for the oil production article:
R
Rajesh K.
This could be good news for India's fuel prices if global crude prices drop significantly. Our government should use this opportunity to build strategic reserves when prices hit $50/barrel. Smart timing can save forex reserves!
P
Priya M.
Interesting analysis but I wonder how much this will actually benefit Indian consumers. Even when global prices fall, our petrol prices don't decrease proportionately due to taxes. Government should reconsider the tax structure if crude becomes cheaper. 🤔
A
Amit S.
US production decline means more dependence on Middle East oil. India should strengthen ties with alternative suppliers like Russia and African nations to diversify our energy sources. Can't put all eggs in one basket!
S
Sunita R.
Instead of celebrating temporary price drops, India should accelerate renewable energy projects. This oil volatility shows why we need energy independence through solar and wind power. Jai Hind! 🇮🇳
V
Vikram J.
The report mentions Guyana and Brazil as alternative sources - India should explore long-term contracts with these countries. Our refiners are world-class, we just need stable supply at good prices. Make in India needs affordable energy!
N
Neha T.
While lower oil prices help our economy, we must remember this is temporary. The real solution is reducing oil dependence through electric vehicles and better public transport. Delhi's air quality can't take more petrol/diesel vehicles!

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