Offshore where the next wave of U.S. oil growth to come from?

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U.S. energy executives are forecasting a significant increase in offshore oil production under a potential second Trump administration, attributing this to streamlined permitting processes, sustained investments, and technological advancements. The Gulf of Mexico's output is projected to rise from 1.8 million barrels per day (bpd) to 2.4 million bpd by 2027, according to estimates from the U.S. Energy Information Administration (EIA) and the Bureau of Ocean Energy Management (BOEM).

While shale oil offers flexibility, its growth is expected to plateau, prompting companies to focus more on offshore drilling. The Trump administration's commitment to expediting oil and gas project approvals on federal lands is anticipated to further bolster offshore activities.

BOEM currently manages 2,227 active leases on the U.S. Outer Continental Shelf (OCS), with 469 leases producing as of 2024. In 2023, OCS leases generated over $7 billion in federal revenue and accounted for approximately 14% of total U.S. crude production.

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Energy companies are deploying AI-driven tools to reduce risk, increase productivity, and optimize maintenance. Companies like BP and Devon Energy are using artificial intelligence for predictive modeling, real-time drilling performance, reservoir analysis, and cost forecasting-giving them a competitive edge in volatile price environments.

Despite the appeal of offshore growth, the shift also reflects emerging challenges onshore. The U.S. oil and gas rig count has fallen to its lowest level since November 2021. In the Permian Basin, rig activity is down 11% year-over-year, and fracking activity is showing similar declines. This retreat has forced a strategic recalibration for many operators.

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Still, offshore U.S. production could fill key gaps left by a slowing shale sector. In 2024, federal offshore areas produced 668 million barrels of oil and 700 billion cubic feet of natural gas-figures that are expected to climb as new projects come online and lease activity increases.

Analysts note that despite trade disputes and policy shifts, U.S. offshore oil remains globally competitive. Its high-volume, low-decline profile offers a degree of reliability that investors and buyers increasingly value.

Ultimately, the outlook for U.S. oil production-onshore and offshore-will depend on a combination of market prices, regulatory conditions, and geopolitical risk. But for now, the message from the Gulf is clear: offshore is no longer a sideshow. It's where the next wave of U.S. oil growth may be anchored.

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