NEW YORK, Jan 13 (Reuters) – Lower oil prices are expected to cut U.S. drilling activity and reduce output by 1% this year from the top producing country, while potentially higher supply from Venezuela could add pressure, the Energy Information Administration said on Tuesday.

The comments from the Department of Energy’s statistical arm echo concerns expressed by some U.S. oil producers about U.S. President Donald Trump‘s request for domestic oil companies to enter Venezuela and help raise its output after the capture of President Nicolas Maduro. Already reeling from low oil prices, U.S. shale producers have said the push for more Venezuelan oil to hit the markets will hurt them even more.

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Brent crude oil prices are likely to average $56 a barrel this year, compared to $69 a barrel last year, as global production of liquid fuels outpaces demand and causes a buildup of inventories, the EIA said in its monthly Short Term Energy Outlook report.

The EIA’s latest outlook was finalized under the assumption that sanctions against Venezuela will stay in place through 2027, the agency said. If those sanctions ease, oil prices could fall more steeply than its current expectation, the EIA said.

“Any change in sanctions or other U.S. government policy related to Venezuela that could result in more oil production than we assumed in this forecast would put additional downward pressure on oil prices,” the EIA said.

U.S. Treasury Secretary Scott Bessent told Reuters on Saturday that more U.S. sanctions on Venezuela could be lifted as soon as this week to facilitate oil sales.

U.S. oil production is set to slip to an average of 13.59 million barrels per day this year, and then to 13.25 million bpd next year, before factoring in the anticipated easing of sanctions against Venezuela, the EIA said. U.S. oil output averaged a record 13.61 million bpd in 2025, the agency said.

“Over the next two years, we expect sustained lower crude oil prices will result in a pullback in drilling and completion activity that is enough to outweigh ongoing increases in productivity,” the EIA said.

Reporting by Shariq Khan and Scott DiSavino in New York
Editing by Rod Nickel

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Shariq is a New York-based energy reporter and has led coverage of the destruction caused in the oil patch by the coronavirus pandemic, the industry’s rebuilding efforts, and the upheaval of trade routes from Russia’s invasion of Ukraine, among other major developments.

Covers the North American power and natural gas markets.