U.S. Petroleum Barely Holds Energy Lead Over Gas as Consumption Hits 96 Quads
Petroleum retained its position as the top source of U.S. energy consumption in 2025, but only by a margin narrow enough to matter. EIA data show petroleum accounted for 37% of total U.S. energy use last year, with natural gas close behind at 36% — a gap that has been narrowing for years as gas displaces oil across power generation and industrial sectors.5
Total U.S. energy consumption reached 96 quadrillion British thermal units in 2025, according to EIA analysis published on June 30 (2026-06-30), an increase of 2% from the prior year. That uptick reversed a period of relative flatness and reflects growing demand from data centres, manufacturing reshoring, and continued household energy use.5
The near-parity between petroleum and gas in the consumption mix marks a structural shift decades in the making. Gas overtook coal as the second-largest source of U.S. energy years ago; the question now is whether gas closes the remaining gap with petroleum over the next decade, or whether electric vehicle adoption remains too slow and oil demand in aviation and petrochemicals holds petroleum's share firm.5
On the supply side, the EIA's Short-Term Energy Outlook shows marketed natural gas production in the Lower 48 states averaged 117.2 billion cubic feet per day in the first quarter of 2026, a 4% rise versus the year-earlier period. The agency foresees 3% growth for the full year 2026 relative to 2025, driven mainly by the Permian Basin, where output is projected to reach 29.2 Bcf/d — 6% above 2025 levels.1
The Haynesville formation, a gas-dominant play in Louisiana and Texas, is separately projected to grow 6% in 2026 and 8% in 2027 as pipeline takeaway capacity expands and LNG export demand pulls more volumes from the basin. EIA expects infrastructure bottlenecks that currently constrain Permian gas to ease later this year, with Permian production then growing a further 10% in 2027.1
Oil production trajectories are rising in parallel. EIA in May projected U.S. crude output, including lease condensate, would average 14.10 million barrels per day in 2027 — a threshold U.S. production has never sustained on an annual or even monthly basis, according to the agency's own historical records. Whether shale operators can sustain that volume depends on Permian well productivity trends, pipeline egress, and the durability of current crude prices.4
ICE Brent crude front-month traded at $76.28 on Thursday (2026-07-09), up 0.53% on the session. NYMEX Henry Hub front-month stood at $3.02, a gain of 0.33%. Measured in energy-equivalent terms, the spread between the two benchmark fuels remains wide enough to keep gas competitive against petroleum in many fuel-switching contexts.
Commercial crude oil inventories built by 3.8 million barrels for the week ending June 27 (2026-06-27), EIA data showed, bringing stockpiles to 419 million barrels, roughly 9% below the five-year seasonal average. That deficit, even after several weeks of modest builds, leaves less cushion against supply disruption than is typical for this time of year.2
The EIA's Annual Energy Outlook 2026 flagged data centre electricity demand as a rising load driver, projecting that server consumption alone will grow substantially by 2050, with standalone data centres accounting for a disproportionate share of the increase. That electricity load will compete for gas both in the power sector and as direct feedstock for backup generation — a dynamic that could widen gas's share of total energy consumption even as renewable capacity expands.3
The gap between petroleum and gas in the consumption mix is now small enough that a single year of above-average industrial demand for either fuel, or an unusually cold winter, can shift the ranking. The next full EIA annual review will show whether petroleum's current one-percentage-point lead over gas proves durable or whether gas closes the gap entirely.