Let's update the prediction for U.S. oil prices by the end of 2025, now factoring in an increase in Utah tar sand oil production alongside previous projections from Texas, the Gulf of Mexico, Alaska, Wyoming, and Montana. Our aim is to predict the West Texas Intermediate (WTI) crude oil price by December 31, 2025, starting from $75 per barrel on March 21, 2025. We will assess whether it could drop to $37.50 or settle elsewhere based on these production boosts under Trump's policies.
For our updated baseline and assumptions, we begin with a starting price of WTI at $75 per barrel, as per EIA trends for March 2025. Current U.S. production is estimated at 13.3 million barrels per day (bpd) according to EIA estimates for early 2025. Previous increases for 2025 include a rise of 200,000 bpd from the Gulf of Mexico in shallow water by Q4, fast-tracked leases, and Alaska remaining flat at 422,000 bpd with the Nuna project coming online late in 2024, showing no significant jump. Wyoming is projected to increase by 10,000 bpd from conservative wells and natural gas liquids, while Montana is expected to see a modest uptick of 2,000 bpd from the Bakken formation. Texas anticipates growth of 400,000 bpd from midrange Permian Basin advancements, increasing from 5.6 million bpd to 5.1 million bpd.
The new addition of Utah tar sands is noteworthy, with Utah holding 1,219 billion barrels of oil in tar sands according to the Utah Geological Survey. However, commercial production has been minimal due to high costs and technical challenges. Current output is negligible, with Petroteq's pilot at Asphalt Ridge targeting just 1,000 bpd, which is not yet scaled. Trump's deregulation could potentially revive projects like PR Spring or Asphalt Ridge, and we assume that shallow, fast-track extraction methods, such as solvent-based techniques, could add 50,000 bpd by Q4 2025. While this is optimistic, it appears feasible with a policy push and existing leases like U.S. Oil Sands or Petroteq scaling up. The breakeven cost is projected at $75 per barrel according to a University of Utah study from 2013, although lower costs are claimed by companies, estimated between $30-$40 per barrel by Petroteq.
With this analysis, total U.S. production could reach 14.25 million bpd by the end of 2025, incorporating the 0.05 million bpd from Utah. Global market demand is expected to be between 104-105 million bpd as per EIA's Short-Term Energy Outlook (STEO) in March 2025. Non-OPEC supply growth is estimated at 2.3 million bpd, with Utah's contribution raising that to 2.35 million bpd, pushing global supply to 107-108 million bpd.
In terms of predicted oil prices by the end of 2025, U.S. production is set to rise by 0.95 million bpd—0.5 million from Gulf of Mexico, Alaska, Wyoming, and Montana, alongside 0.4 million from Texas and 0.05 million from Utah. This increase brings total U.S. production to 14.25 million bpd, while global supply reaches 107-108 million bpd, resulting in an oversupply against demand at 104-105 million bpd, leading to a surplus of 2-3 million bpd, which historically tends to cut prices by 25-40%.
For our price estimates: a 25% drop from $75 leads to $56.25 with a 2 million bpd surplus if OPEC is active; a 30% drop brings the price to $52.50 with a 2-3 million bpd surplus if OPEC is slower to react; and a 40% drop could see prices at $45 with a 3-4 million bpd surplus if demand weakens and OPEC is passive. A drop to $37.50 would require a 5 million bpd surplus, which seems unlikely without a significant demand crash.
.