The number of oil rigs operating in the United States fell by seven to 425 in the week ending July 4, marking a new cycle low and the 10th consecutive week of declining drilling activity, according to data released Thursday by energy services firm Baker Hughes.
The latest drop brings oil rig counts to their lowest level since September 2021 and is a 12% decline from the start of the year. The total US rig count fell by eight to 539.
The sustained decline reflects the oil industry’s continued focus on capital discipline and shareholder returns rather than aggressive production growth. Energy companies have prioritized debt reduction and dividend payments over drilling expansion following years of volatile commodity prices.
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Several major shale producers have scaled back drilling plans for 2025, with companies setting annual programs rather than responding quickly to commodity price fluctuations.
The Energy Information Administration projects crude output will decline from an all-time high of 13.5 million barrels per day in the second quarter of 2025 to an average of about 13.4 million barrels per day for the full year, with further declines expected in 2026 due to fewer active drilling rigs, according to its June Short-Term Energy Outlook.
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