Compiled by Kurt S. Abraham, Editor-in-Chief
It has been yet another year of muddled rig counts and drilling activity in the United States, with active rigs slipping to a low point in August 2025 before recovering slightly in the fourth quarter. Yet, the net result is about the same. In 2024, the U.S. rig count fell roughly 5%, and during 2025, through the third week of December, it was off another 6%.
Nevertheless, U.S. oil production is up again in 2025, according to the U.S. Energy Information Administration (EIA). After gaining 300,000 bpd to average 13.2 MMbpd during 2024, U.S. oil output has gained another 400,000 bpd through mid-December. EIA estimates that U.S. production will average 13.6 MMbopd for all of 2025, when all final data are in. As has been the case in the last several years, where rig counts declined, yet U.S. oil production rose, the results can be attributed to technology gains and further improvements to the drilling process.
But that scenario is about to change. EIA predicts that U.S. oil production will plateau at 13.6 MMbpd and then lose 100,000 bpd through the course of 2026, to finish with an average 13.5 MMbpd. As one might surmise, the U.S. upstream sector has squeezed out all the improvements to drilling and production that it can for the moment. To change this outlook and gain more production, U.S. operators would have to reverse the slow slide in drilling over the last several years. But looking at the global oil market, that possibility remains unlikely.
Similar to U.S. rigs, Canadian activity has been running a bit lower than 2024’s pace. As of the third week of December 2025, Canada’s active rigs averaged 178, down about 5% from the 187-rig level of 2024. After rising 4.0% during 2024 to average 4.776 MMbpd, Canadian oil production this year through August had risen 2.4%, to average 4.889 MMbpd. Once again, this result is a testimonial to the work of Canada’s upstream industry, in spite of the Canadian federal government. While the actions of Prime Minister Carney’s administration have not been as hostile to oil and gas as those of predecessor Justin Trudeau’s regime, they have not been all that helpful, either.
Meanwhile, international activity outside the U.S. and Canada has declined slowly but steadily through 2025. At the end of the third week of December, this year’s international rigs were averaging 1,081 units per month, down 80 rigs/month from the 2024 average of 1,161. And most of this decrease can be attributed to the glut of oil on the global market. Ironically, the only region showing an increase in rig activity is Europe, up four rigs to an average 123 units for 2025 vs. 119 rigs during 2024.
Eleven months of Trump. Back on Jan. 20, 2025, it was anticipated that the new administration of President Donald J. Trump would change the oil and gas picture considerably, not just in the U.S. but globally. Much of what Trump said he would do has been done or is in mid-action. This includes things like opening back up LNG export permits, crafting an excellent, extensive OCS leasing plan, and holding the first oil and gas lease sale in the Gulf of America/Mexico in two years. And a number of other executive orders and rulemakings (including methane by the EPA) have been helpful.
On the other hand, Trump has been consumed with bringing down inflation, including the lowering of gasoline prices. But this has come at a cost to the upstream industry, which has seen too much oil on the market (we think at Trump’s request to Saudi Arabia); the cost of oilfield equipment and services not coming down fast enough (steel tariffs are not helpful); and lackluster demand for oil, which have all worked as disincentives to U.S. operators increasing drilling.
So, while Trump runs around the U.S. trumpeting “Drill, Baby, Drill,” the harsh reality is that U.S. drilling has not increased, and the only reason that U.S. oil output has jumped higher is the industry’s incredible gains in technology and drilling practices. And though Secretary of Energy Chris Wright and Secretary of the Interior Doug Burgum were expected to stimulate great creativity in Trump’s energy policies, they seem to have not realized their full potential and appear to be “yes men” for the President.
Advisors’ perspectives. As we do every year at this time, our core group of advisors on World Oil’s Editorial Advisory Board has worked to analyze what has occurred in the global E&P industry over the last 12 months while also attempting to predict what may happen in the coming year. We can say with confidence that last year’s trend among them to put less emphasis on discussing ESG and sustainability topics and sharpen their focus on operational and regulatory concerns has continued.
Among the sampling of topics from our advisors, we find such things as the shale revolution is still alive and continuing; multiple uncertainties characterize the UK Continental Shelf; orphan wells are an ongoing problem in the U.S.; true energy security is complicated; the situation for “clean energy” is murky; climate policy is now what’s transitioning; energy services are the relentless backbone of the industry; and more.
We invite you to explore their insight and opinions in the following section of articles. WO