According to industry consultant Wood Mackenzie, the US Gulf of America (also known as the Gulf of Mexico before President Trump) will become the US’ main driver of oil supply growth this year. Whilst shale drillers are cutting back on exploration and the drilling of new wells as breakevens are close to the Permian’s $62-63 per barrel breakevens, the GoA enjoys a much healthier breakeven of $30-40 per barrel.
Moreover, Chevron’s most recent offshore additions are breaking even as low as $20 per barrel, with projects such as Ballymore (75,000 b/d capacity) no longer requiring a separate platform and tying back into existing infrastructure instead.
Lack of exploration might impede future growth in the Gulf of America as licensing was virtually non-existent in Biden years, with the last big discovery coming from Shell’s 2017 Whale find, but the GoA will enjoy a sweet couple of years ahead regardless. Meanwhile US oil major ExxonMobil reported two new discoveries offshore Canada’s Newfoundland, boosting reserves in the Hibernia and Hebron production clusters by 75 million barrels, OilPrice reported.
The Gulf of Mexico, recently referred to as the “Gulf of America” in some U.S. contexts due to an executive order by President Donald Trump, is experiencing a resurgence in oil and gas production. The U.S. Energy Information Administration (EIA) forecasts stable crude oil production in the Gulf of America. By 2027, output is projected to reach 2.4 million bpd, driven by new fields and technological advancements.
Thirteen new fields are expected to start production over the next two years, adding 85,000 bpd in 2025 and 308,000 bpd in 2026, with notable projects like the Whale field peaking at 85,000 bpd. Major companies like Chevron and BP are boosting output. Chevron’s Ballymore project, started in April 2025, and BP’s Far South field discovery are significant contributors.
The Bureau of Ocean Energy Management (BOEM) estimates the Gulf holds 29.59 billion barrels of technically recoverable oil and 54.84 trillion cubic feet of gas, with an additional 1.3 billion barrels identified in recent analyses. A recent oil spill off Louisiana’s coast, starting April 26, 2025, from a capped well, has raised alarms about environmental impacts and response capabilities.
Fifteen years after the Deepwater Horizon disaster, restoration efforts continue, but funding is dwindling, and lawsuits remain unresolved. Investigations reveal that oil companies, including Pemex, have underreported spills, with satellite imagery and local fishers’ evidence contradicting claims of “natural” oil releases. Frequent spills and unplugged wells (over 14,000 in the Gulf) highlight ongoing environmental challenges. Regulatory rollbacks under the Trump administration may exacerbate these risks.
The Trump administration is pushing for increased drilling, with plans for a Gulf lease sale in June 2025. Interior Secretary Doug Burgum adjusted financial assurance rules to lower startup costs for oil firms, aiming to bolster production. Stable production through 2026, with significant growth by 2027, positions the Gulf as a critical energy hub. However, hurricane risks (predicted above-normal activity in 2025) and regulatory shifts could disrupt timelines.
The renaming dispute with Mexico underscores broader diplomatic strains, potentially complicating cross-border energy cooperation. Trump’s executive order to rename the Gulf of Mexico the “Gulf of America” has sparked international tension. Mexico sued Google for adopting the name on U.S. maps, arguing it violates sovereignty. The House passed a GOP-led bill to codify the name change, though it only applies within U.S. jurisdiction.
Gulf production is outpacing shale due to low breakeven costs (as low as $20/bbl) and long-term project commitments, despite falling crude prices. However, rig counts in the Gulf dropped to nine in May 2025, the lowest since September 2021, reflecting market caution amid global trade uncertainties. The Gulf’s resurgence is a boon for U.S. energy independence, contributing ~15% of total U.S. crude output. Lower breakeven costs make it attractive compared to shale, but oil prices and geopolitical volatility could temper investment.
/OilPrice, X/