Record oil production in Texas stabilizes US supply during tension with Iran

Texas produced nearly half of all U.S. oil last year despite having drilled fewer new oil wells in 2025. And that West Texas oil has helped keep U.S. supply steady as oil supply across the world has been squeezed during the Iran war, experts said.

American oil companies produced 13.6 million barrels of oil daily last year, once again breaking their own record, according to a report by the Energy Information Administration. Almost half — 6.6 million barrels a day — came from the Permian Basin, the vast stretch of oil-rich deposits spanning tens of thousands of square miles between western Texas and southeastern New Mexico.

The report’s findings aren’t a first for Texas oil companies. For at least the past six years, industry groups have announced record production levels. Industry and political leaders alike have celebrated the production as a win for the state’s economy, saying royalties and taxes from the industry translate to billions of dollars for the state’s coffers and school districts.

In light of the U.S. war on Iran, domestic oil production — particularly in West Texas — has taken on a new meaning. The war pushed gas prices sky high as the global supply of oil has been slashed during the conflict. On Tuesday, oil prices soared to at least $114 a barrel prior to the ceasefire.

Oil companies accomplished the record with a fraction of available drilling rigs, which the industry historically relied on to search for, find and lift fossil fuels from the ground. The EIA, in its report, said fewer rigs could lead to a 2% drop in production in 2027, marking the first time oil could dip since 2021.

Texas Oil and Gas Association President Todd Staples said that 10 years ago, oil companies drilled 9.2 million barrels of oil using 1,543 rigs. In 2025, oil companies produced more than 13 million barrels with only 582 rigs.

The agile infrastructure — and geology beneath — affords operators in the Permian to adapt quickly when the market is under duress.

Different layers of rock underground allow operators to extract more fossil fuels at varying depths. Operators can also transit between wells within hours rather than days, drill multiple wells from a single site, or drill in multiple directions and at multiple depths.

Experts suggested it could be worse. A mix of experts and groups representing oil companies’ interests in Texas said the U.S. has been insulated from more devastating economic consequences of the war. 



Oil fields in Odessa, Texas (AP file photo)