Baker Hughes Rig Count Weekly

U.S. Drilling Activity Overview

The U.S. rig count stands at 580 as of the July 2 Baker Hughes release — up 6 rigs from the prior week, published Thursday ahead of the Independence Day holiday. Oil rigs rose 5 to 445 while natural gas rigs held at 124 and miscellaneous rigs edged up to 11. The gains were led by the Permian Basin. Crude prices sit near four-month lows even after a security-driven spike this week, when Iran struck a Qatari LNG tanker near Hormuz and the U.S. revoked Iran’s oil-sale license (Brent settled +3% at $74.16, WTI $70.44). With OPEC+ adding barrels and Saudi Aramco cutting Arab Light to Asia, the supply backdrop stays bearish — a soft price outlook that argues for restraint on rig additions even as operators weigh summer demand. Rising oil rigs translate to higher production six to twelve months out, though the response remains modest relative to the Persian Gulf supply now flowing back. The July 2 release was shifted earlier for Independence Day; the next weekly count follows the normal Friday schedule.

Of the 544 active rigs, 533 are land-based and 11 are offshore. The Gulf of Mexico accounts for 10 offshore rigs. By drilling trajectory, 484 rigs (89%) are horizontal — the dominant technique for shale development — with 48 directional and 12 vertical. Texas leads all states with 234 rigs (+2 w/w), followed by New Mexico at 98 (-2) and Oklahoma at 43 (+1).

Canada's rig count rose 1 to 124 as spring breakup eases. Canadian drilling is highly seasonal — spring breakup typically reduces activity as thawing ground makes road access difficult, and the recent low was hit in late April. Oil rigs sit at 76 while gas rigs hold at 48. Year-over-year, Canada is down 8 rigs from 132.

International Drilling Activity — March 2026

The international rig count fell 54 to 1,058 in March 2026, driven primarily by a 38-rig decline in the Middle East as regional conflict disrupted drilling operations. Asia-Pacific lost 17 rigs to 190. Latin America was the only region to gain, adding 5 rigs to reach 143 — led by activity in Brazil, Argentina, and Colombia.

Year-over-year, the international count is down 37 rigs from 1,095 in March 2025. The Middle East decline reflects the direct impact of the U.S.-Iran conflict on regional drilling programs, with operators in Iraq, Kuwait, and the UAE scaling back amid security concerns and logistics disruptions from the Strait of Hormuz closure.

Why the Rig Count Matters for Energy Markets

The Baker Hughes rig count is one of the most closely watched indicators in energy markets. Published weekly since 1944, it measures the number of drilling rigs actively exploring for or developing oil and gas reserves. The count serves as a leading indicator of future production — today's drilling activity determines supply levels 3-6 months ahead.

The relationship between rig counts and production has evolved significantly. In 2014, it took roughly 1,600 rigs to produce 8.7 million barrels per day. Today, approximately 580 rigs support 13.6 million bpd — a 280% improvement in per-rig productivity driven by longer lateral wells, faster drilling speeds, and optimized completion techniques. This means the rig count alone doesn't tell the full production story, but directional changes remain highly informative.

The current environment is defined by capital discipline. Despite crude prices elevated above $90/barrel due to the Iran conflict, operators are not aggressively adding rigs. Instead, they're returning cash to shareholders through dividends and buybacks while maintaining flat to slightly declining rig activity. This restraint supports the bullish case for oil prices — supply growth is structurally limited even as demand continues to recover.