The United States is one of the largest crude oil producers in the world. In 2018, the U.S. became the world's top crude oil producer. In 2019 and 2020, the country maintained this position.
In the U.S., crude oil is produced in 32 U.S. states and in U.S. coastal waters. Our research has found that in 2020, about 71% of total U.S. crude oil production came from five states, where the oil and gas industry has been operating for generations. Here are the six states that produce the greatest amount of crude oil.
- The United States is one of the largest crude oil producers in the world.
- In the U.S., crude oil is produced in 32 U.S. states and in U.S. coastal waters.
- In 2020, about 71% of total U.S. crude oil production came from five states, where the oil and gas industry has been operating for generations.
- Texas is the largest domestic producer of oil in the United States.
It's no surprise that Texas is the largest domestic producer of oil. Texas has had a culture associated with the oil business for more than a century. Many historians trace the beginning of the modern oil era to the famous Spindletop well drilled near Beaumont, Texas in 1901. The well blew out and reportedly produced 100,000 barrels of oil per day until it was brought under control nine days later.
In 2020, 43% of the total U.S. crude oil production came from Texas. The oil industry is currently focused on increasing Texas oil development from the Eagle Ford Shale, the northern part of the Barnett Shale, and the Permian Basin.
2. North Dakota
North Dakota has been one of the fastest-growing state oil producers over the last few years. This amazing growth has been powered by the development of the Bakken formation in the Williston Basin and other areas of the state. The majority of oil rigs operating in North Dakota currently are targeting the Bakken and Three Forks formation.
In 2020, 10.4% of the total U.S. crude oil production came from North Dakota.
3. New Mexico
New Mexico is the third-largest domestic oil producer. The state is a relative newcomer to the business compared to other top producers, with the first successful commercial oil well drilled in 1924.
In 2020, 9.2% of the total U.S. crude oil production came from New Mexico.
Oklahoma comes in fourth in oil production, with average daily production of 321,000 barrels per day in February 2021. The oil industry in Oklahoma also has a long and storied history; Nellie Johnstone No. 1 was the first commercially productive oil well in Oklahoma (located near Bartlesville, Oklahoma). This well kicked off the beginning of an oil boom in 1897. Oklahoma was also where Jean Paul Getty got his start in the oil business in the early 1900s. Getty later went on to run the Getty Oil Company and became one of the first billionaires in the United States.
Colorado is the fifth-largest producer of crude oil. In 2020, as a result of new horizontal drilling and hydraulic fracturing technologies, the state produced about four times more crude oil than it did in 2010.
The majority of oil production in Colorado comes from the Niobrara Shale formation, which is located in the Denver-Julesburg Basin in northeastern Colorado. Oil production in Weld county is the source of almost nine out of every 10 barrels of crude oil produced in Colorado.
In 2020, 4.0% of the total U.S. crude oil production came from Colorado.
Alaska is the sixth-largest oil producer of crude oil, with average daily production of 457,000 barrels in February 2021. The state was a relatively minor source of domestic production of crude oil until the discovery of oil in the North Slope in the 1970s. Production from the Prudhoe Bay field and other fields began in 1977 and at one point comprised 20% of all U.S. oil production.
Unfortunately for the United States, Alaskan oil production has been in a steep decline since the late 1980s, when production peaked at over two million barrels per day. This will probably continue declining as the industry is focused on other areas that are easier to develop.
The Bottom Line
A handful of states are responsible for much of the domestic oil production in the United States, and these states have a long association with the oil industry, dating back more than a century. For as long as the world continues to heavily rely on oil (and for as long as oil lies beneath U.S. soil) these six states can count on big profits from the oil fields for years to come.