The latest update to the S&P Global Commodity Insights’ Crude Oil Markets Short-term Outlook, released on May 12, indicated that U.S. crude oil production is now projected to decline in the coming year amid slowing demand.

The report now expects global oil demand growth to average 750,000 barrels per day in 2025. This represents a downward revision of 500,000 barrels per day compared to the previous forecast, the report said.

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Oil prices have dropped to $62.49 a barrel, marking a decline of about 13% since President Trump’s tariff push in early April, the report added. Adjusted for inflation, that price is equivalent to around $45 in 2015 dollars, lower than the average price that triggered a significant industry downturn that year.

According to S&P, output is expected to decline by 1% next year, falling to 13.33 million barrels per day. The decrease is in part due to the weakening demand outlook and an anticipated supply surplus, likely exacerbated by recent OPEC+ decisions to ramp up production more quickly. This would represent the first year-over-year decrease in nearly a decade, excluding the disruption caused by the COVID-19 pandemic.

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“Slowing global oil demand amid extreme uncertainty about the future of U.S. trade and a coming supply surplus are expected to hobble U.S. oil production growth later this year and could lead to an annual decline in output in 2026, according to a new analysis by S&P Global Commodity Insights,” VP and Global Head of Crude Oil Research Jim Burkhard,  Associate Director Ian Stewart and the S&P Global Commodity Insights Crude Oil Markets team said in the analysis piece.

To read more about the S&P Global report, click here.