(Bloomberg) -- Shale oil production, which has revolutionized the energy industry and transformed the US economy, will stop growing in August, according to a government report.

After hitting record highs in June and July, US crude production is set to fall in August for the first time this year to 9.4 million barrels a day, led by a drop in the oil-rich Permian Basin. Combined with production cuts from the OPEC+ alliance, the US decline is expected to tip the world’s oil supply into deficit by the end of the year.

US onshore production has slowed as oil companies limit capital spending in favor of boosting returns to shareholders — a shift in strategy after chasing production growth at all costs over the last decade. At the same time, the most prolific basins have largely been leased up by oil companies willing to slow down and wait for the most opportune time to ramp up. Oil prices have fallen by 28% from a year ago amid demand headwinds and voluntary cuts.

The slowdown is also evident in a drop in the number of wells that have been drilled but not completed, which shows producers are clearing up a backlog. Still, four major forecasters expect the Permian — America’s largest oil basin that covers swaths of West Texas and New Mexico — to expand output by 40% from current levels to peak in 2030, according to a Bloomberg survey.

(Updated details throughout)

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