The U.S. oil industry is gushing, with record production expected in 2023 as companies try to cash in on high prices
Crude prices are expected to stay high enough to drive U.S. oil production to record highs in 2023.
Domestic production will rise to 12.6 million barrels daily in 2023, or 600,000 more barrels than in 2022, the U.S. Energy Information Administration (EIA) forecast this week. That would surpass the previous record production of 12.2 million barrels in 2019.
The increase in 2023 shows a recovery in oil pumping from the massive decline early on during the COVID-19 pandemic, when oil prices dropped below $19. Crude oil is currently at around $91 a barrel.
The EIA attributed much of the expected gains to new wells in the Permian Basin, in West Texas and Southeast New Mexico. The agency said that there were about 220 oil rigs added in the lower 48 states, and 114 of those were in the Permian region.
The EIA expects that Permian Basin will produce 5.3 million barrels daily in 2022, increasing to 5.7 million barrels the next year.
For a detailed look at rising oil production in the Permian Basin, read Fortune’s 2018 feature story about the Texas oil boom. It covers how companies like Exxon Mobile and Occidental Petroleum have high hopes for the region, which they compare to “Saudi Arabia’s Ghawar field, widely regarded as the mother of all giant petroleum troves—what the industry calls ‘elephants.’”
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