U.S. Rig Count in 2025: A Tale of Two Fuels

U.S. Rig Count in 2025: A Tale of Two Fuels

The Baker Hughes rig count has long served as a barometer for drilling activity and energy sector health. In 2025, the rig count tells a story of divergence: while oil rigs retreat, gas rigs are quietly staging a comeback. Here's what the trendlines reveal—and what they mean for markets.

A Quick Overview: 2025 U.S. Rig Count Trends

• January to March: The year began with 589 total rigs. By mid-February, activity stabilized near 593 rigs, before plateauing into March.

• April Peak: The rig count peaked at 587 rigs in mid-April, with oil rigs rising to 489.

• May Slide: A consistent decline began, falling to 563 rigs by the end of May—the lowest since November 2021.

• June Low: As of mid-June, the U.S. rig count dropped to 555, continuing a six-week downward streak. Oil rigs fell to 439, while gas rigs climbed to 113, marking a 15% YoY increase in gas-focused activity.

What’s Driving the Shift?

• Oil Price Uncertainty: U.S. drillers have pulled back on oil rigs amid volatile prices and capital discipline.

• Gas Market Rebound: Natural gas rigs are rising as producers anticipate higher prices in the second half of 2025.

• Capital Restraint: E&P companies are trimming budgets by ~3%, prioritizing returns over aggressive expansion.

The Big Picture

• Oil Rig Contraction: Down ~50 rigs since April, reflecting a cautious outlook on U.S. shale oil.

• Gas Rig Resilience: Quiet growth in gas rigs reflects optimism around LNG exports and domestic demand.

• Market Impact: A tightening in domestic gas supply, due to both fewer associated gas sources and increased exports, is setting up a bullish case for Henry Hub prices.

Conclusion

The 2025 Baker Hughes rig count reveals a clear pivot: the age of aggressive oil rig expansion is tapering, while natural gas may be stepping into a period of renewed relevance. For market watchers, traders, and policymakers, the message is clear: follow the gas rigs—they may be pointing toward the next major move in U.S. energy markets.