As small business owners navigate a rapidly changing economic landscape, new forecasts from the U.S. Energy Information Administration (EIA) present both opportunities and challenges regarding crude oil production. According to the EIA’s January 2026 Short-Term Energy Outlook, U.S. crude oil production is expected to maintain a near-record pace this year before facing a slight decline in 2027. For small businesses, understanding these dynamics could lead to better planning and strategic decisions around energy sourcing and costs.
The EIA projects that crude oil production will remain close to the record high of 13.6 million barrels per day established in 2025, dipping to 13.3 million b/d in 2027. Notably, this forecast marks the first decrease in U.S. crude oil production since 2021—a significant shift for businesses reliant on stable energy prices.
"The slowdown in drilling activity will outpace recent increases in drilling productivity that have bolstered U.S. crude oil production," stated Naser Ameen, the principal contributor to the report. This translates to heightened awareness for small business owners, particularly those in sectors like transportation and manufacturing, where fuel costs can directly affect profit margins.
Key Takeaways:
- U.S. crude oil production will remain near record levels in 2026 but is expected to decline by 2% in 2027.
- Low crude oil prices are projected, with the average West Texas Intermediate price falling from $65 per barrel in 2025 to $52 in 2026 and $50 in 2027.
- Production declines in the Lower 48 states are offset by growth in regions like the Gulf of America and Alaska.
The report highlights that production growth will be tempered by reduced activity in the Lower 48 states as low prices diminish operators’ incentives to drill. As costs decline, small business owners should prepare for potential fluctuations in supply and demand that could impact operational costs.
A notable aspect of the forecast is the anticipated stability in the Permian region, which accounted for nearly half of total U.S. crude oil production in 2025. EIA reports predict Permian production will remain constant at approximately 6.6 million b/d in 2026, with a slight decline to 6.5 million b/d in 2027. This consistency might offer some reassurance to businesses dependent on this critical energy source.
However, it’s the Gulf of America that is projected to see growth, with production expected to rise from 1.9 million b/d in 2025 to 2.0 million b/d in 2026, while Alaska’s crude oil output is set to increase from 0.4 million b/d in 2025 to 0.5 million b/d in 2027. These developments could open new avenues for small businesses looking to source oil from regions on the rise, potentially providing cost-effective alternatives as prices fluctuate.
For many operators, the breakeven price remains a vital metric. Oil industry executives indicate that the largest basins in the Permian have breakeven prices hovering around $61 to $62 per barrel. The projected drop in West Texas Intermediate prices below these levels raises important questions for small businesses regarding the sustainability of local energy sources and how these fluctuations could affect their operational budgets.
The expected shift in treasury production underscores the complex interplay between local and national resources.
As owners consider how forthcoming energy price changes may influence their operations, this evolving landscape presents not just challenges, but also opportunities. Businesses may want to assess their supply chains carefully and explore cost-saving measures, including energy-efficient practices and alternative sourcing that can mitigate rising operational costs.
The latest EIA outlook underscores the critical importance of staying informed about energy trends and adapting strategies accordingly. For more detailed insights into the forecast, small business owners can visit the original EIA report here. By maintaining flexibility in their planning, small businesses can navigate the unpredictable waters of energy production and pricing more effectively, ensuring resilience amid evolving market dynamics.
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