API: STATE OF AMERICAN ENERGY IS STRONG AS ‘DEMAND DECADE’ ARRIVES
The American Petroleum Institute (API) on Jan. 13 convened its annual State of American Energy event, bringing together industry leaders, policymakers and market analysts to examine the forces shaping America’s energy future as demand accelerates at home and abroad.
In his keynote address, API President and CEO Mike Sommers outlined the policy choices he said will determine whether the United States sustains its energy leadership during the coming “demand decade,” while also addressing recent geopolitical developments, including Venezuela, and their implications for global energy markets.
“The next ten years are shaping up to be the Demand Decade—an era that is going to require historic amounts of new energy,” Sommers said. “Whether our nation can meet that demand will define its trajectory.”
Sommers said the United States is uniquely positioned to meet this moment. “The state of American energy is strong. There is no nation better positioned to lead in this new era.”
The United States today leads the world in oil and natural gas production, producing more than 13 million barrels of oil per day — more than any country in history. Sommers outlined API’s 2026 policy agenda — infrastructure, access, and international competitiveness.
“The United States is the world’s energy superpower – but that status isn’t guaranteed,” Sommers said. “Infrastructure. Access. International competitiveness. Across all three, the priority is the same: durable policy that outlasts political cycles and supports long-term investment, reliability, and growth.”
Sommers pointed to comprehensive permitting reform as the “hinge point” of the Demand Decade and the top energy policy priority of 2026. “Right now, America has energy in the ground — and demand on the grid — but too often the connection between the two is blocked by red tape, delay and endless lawsuits.”
Against the backdrop of rising global demand, Sommers also addressed recent developments in Venezuela and the conditions required for long-term energy investment.
“Turning reserves into sustained production – whether in Venezuela or anywhere else – requires more than expertise and geology. It requires stable governance, rule of law, operational security, physical safety, and long-term investment certainty.”
Sommers concluded by pointing to a growing national consensus around “energy realism.”
“Americans spent years being told they should do less, build less, produce less and pay more. We’re done with that,” Sommers said. “The mainstream has moved decisively toward abundance, affordability, and growth. …This is the clearest public consensus we’ve seen in a decade.”
The event featured conversations with Marathon Petroleum Chairman, President and CEO Maryann Mannen, who is also the chairman of the API board; EQT Corporation President and CEO Toby Rice; Cheniere Energy President and CEO Jack Fusco; Rapidan Energy President and Founder Bob McNally; ClearView Energy Partners Managing Director Kevin Book; and Veriten Partner Arjun Murti on the policy, economic and geopolitical forces shaping global energy markets. The program also included a conversation with Andy Garcia, an award-winning actor from the Paramount+ series Landman, who discussed how the hit show is elevating the stories of the men and women who power the country.
SHORT-TERM ENERGY OUTLOOK
Forecast overview
• This edition of our Short-Term Energy Outlook (STEO) is the first to include forecasts for 2027.
• Global oil prices. We expect oil prices will decline in 2026, as global oil production exceeds global oil demand, causing oil inventories to rise. Global inventories continue increasing into 2027, albeit at a slower pace. We forecast the Brent crude oil price will average $56 per barrel (b) in 2026, 19% less than in 2025, then average $54/b in 2027.
• Global oil production. We expect global production of liquid fuels will increase by 1.4 million barrels per day (b/d) in 2026 and 0.5 million b/d in 2027. Global liquid fuels production growth in 2026 is driven by crude oil production growth in OPEC+, while production growth in 2027 is driven by countries outside of OPEC+, primarily in South America. Our forecast assumes existing sanctions on Venezuela remain in place through 2027.
• U.S. crude oil production. After reaching an annual record of 13.6 million b/d in 2025, we forecast U.S. crude oil production will decrease in the forecast, declining by less than 1% in 2026 and by 2% in 2027. With sustained lower crude oil prices, we expect crude oil production will decrease as the slowdown in drilling activity will outpace increases in drilling productivity. The West Texas Intermediate price averages $52/b in 2026 and $50/b in 2027 in our forecast, down from $65/b in 2025.
• U.S. gasoline prices. Retail gasoline prices in our forecast for 2026 and 2027 are lower compared with 2025, which largely reflects our forecast of lower crude oil prices. We forecast U.S. gasoline prices in 2026 will average just over $2.90 per gallon (gal), a decrease of nearly 20 cents/gal from 2025. In 2027, we forecast prices to remain mostly flat at an annual average of just over $2.90/gal.
• Natural gas prices. We expect the spot price of natural gas at Henry Hub to average just under $3.50 per million British thermal units (MMBtu) in 2026, down 2% from 2025, and average $4.60/MMBtu in 2027. Natural gas prices increase in our forecast because growth in demand—led by expanding liquefied natural gas exports and more natural gas consumption in the electric power sector—will outpace production growth.
• Electricity consumption. We forecast electricity consumption will grow by 1% in 2026 and 3% in 2027, marking the first four years of consecutive growth since 2005–07, and the strongest four-year period of growth since the turn of the century. Rising electricity consumption in our forecast is mostly the result of growing power demand in the commercial and industrial sectors. The driving factor behind this surge is increasing demand from large computing centers. Tristan Abbey, Administrator of the U.S. Energy Information Administration, said that electricity demand will rise through 2027, “driven largely by increasing demand from large computing facilities, including data centers.”
• Electricity generation. Solar power supplies the largest increase in power generation in the forecast. We expect 69 gigawatts of solar capacity additions during the forecast period, leading to a 21% increase in solar generation during both 2026 and 2027. We expect natural gas generation will remain flat in 2026 and rise by 1% in 2027. Generation from coal-fired power plants falls by 9% in 2026, followed by a less than 1% decrease in 2027.
Release Date: January 13, 2026
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