EIA: US oil drilling will slow down as prices fall, Venezuela's growth could increase pressure

Lower oil prices will likely reduce?U.S. The Energy Information Administration reported on Tuesday that drilling activity will reduce production by 1% in the top producing country this year, and a possible increase of supply from Venezuela may 'add pressure. The Department of Energy’s statistical arm echoes concerns from some U.S. producers regarding President Donald Trump’s request that domestic oil companies enter Venezuela to help increase its production after President Nicolas Maduro was captured. U.S. oil producers are already struggling with low oil prices. They say that the demand for more Venezuelan oil will only make them worse.

The EIA's monthly report, Short Term Energy Outlook, stated that Brent crude oil is likely to averaging $56 a bar this year compared to $69 a bar last year. This is because global liquid fuel production outpaces the demand, causing a?buildup of stocks.

EIA said that its latest outlook was "finalized" under the assumption sanctions against Venezuela would remain in place until 2027. The EIA stated that if sanctions were to ease, oil prices might fall even more than their current expectations.

The EIA stated that "any change in sanctions or any other U.S. Government policy related to Venezuela which could result in more production than we assumed in this estimate would add additional downward pressure to oil prices." U.S. Treasury secretary Scott Bessent said on Saturday that additional U.S. sanctions against Venezuela could be lifted this week in order to facilitate oil sales.

The EIA reported that the U.S. production of oil is expected to fall to a record 13.59 million barrels a day in this year and then to 13.25 next year. This is before taking into account?the anticipated ease of sanctions against Venezuela. The agency reported that U.S. oil production averaged a new record of 13.61 million barrels per day in?2025.

The EIA stated that "over the next two-years, we expect sustained low crude oil prices to result in a reduction in drilling and completion activities sufficient to offset ongoing productivity increases." (Reporting and editing by Rod Nickel, Shariq Khan in New York and Scott DiSavino)

(source: Reuters)