Oil production is a cornerstone of the US economy, significantly impacting both state and national growth. The top oil-producing states are Texas, North Dakota, New Mexico, and others, contributing millions of barrels annually, driving job creation, infrastructure development, and state revenues. In 2023, the US produced approximately 827.1 million metric tons of crude oil per day, with Texas alone accounting for over 40% of that total. As the nation shifts toward energy independence and sustainability, these states remain vital in meeting domestic demands and maintaining the US’s position as a global energy leader, balancing economic benefits with environmental considerations.

List of 10 Oil Producing States in the USA

These are the top 10 oil producing states in the USA

1. Texas
2. New Mexico
3. North Dakota
4. Colorado
5. Oklahoma
6. Alaska
7. California
8. Wyoming
9. Utah
10. Louisiana

1) Texas

Texas is the US’s top crude oil producer, producing an incredible 2,011,995 thousand barrels of oil annually. Approximately 5.6 million barrels of oil are processed daily by its 32 petroleum refineries. The illustrious Spindletop well near Beaumont, which inaugurated the modern oil industry, marked the beginning of its oil-rich history in 1901. The well changed the US energy and transportation industries with its astounding 100,000 barrels per day production.

Apart from oil, Texas is the top producer of power, producing about twice as much as Florida, the state with the second-highest production. Half of the energy used in the state is consumed by its industrial sector, which includes petrochemical and refinery facilities. Texas’s unique electrical grid, managed by the Electricity Reliability Council of Texas (ERCOT), operates independently, supplying 75% of the state’s electricity without federal oversight. This makes Texas a powerhouse in both oil and energy production.

Moreover, Texas is home to several of the largest refineries in the United States, further cementing its critical role in the country’s energy sector. The state also benefits from a well-established pipeline network, which facilitates efficient transportation of crude oil to various refineries and export terminals. With the increasing energy demand, Texas continues to play a pivotal role in meeting both domestic and global oil needs, ensuring its position as the top oil producer in the US

2) New Mexico

With an incredible 667,535 thousand barrels of oil produced each year, New Mexico ranks second in the nation for oil production. Despite the pandemic, it is one of the few states that saw a rise in oil output from 2019 to 2020. Despite being relatively new to the oil industry, the state of New Mexico’s first commercial well was drilled in 1924, oil and natural gas are now vital to the state’s economy. Employing the greatest number of people in the state, the sector provides more than $2.5 billion in funding for public services, roads, and schools each year.

The industrial and transportation sectors of the state account for approximately one-third of the total energy usage. Notably, New Mexico’s transportation sector consumes more energy per capita than nearly 75% of other states, with over 80% of the petroleum used in the state going to transportation. Despite oil’s importance, mining, including oil and gas, makes up only a 10th of New Mexico’s GDP. However, its impact on employment and public funding is undeniable, solidifying the industry’s significance in the state’s development.

New Mexico’s oil industry supports tens of thousands of jobs, driving economic development in rural areas and boosting local communities. Furthermore, the state is home to vital pipeline infrastructure, ensuring efficient transport of crude oil to refineries both domestically and internationally. With continued investment and technological innovation, New Mexico is poised to maintain its status as a major player in the US oil market.

3) North Dakota

North Dakota is the third-largest oil-producing state in the US, generating 432,735 thousand barrels annually. Its quick rise since 2016, mainly because of the expansion of the Bakken Shale formation in the Williston Basin, has helped it to become the third-largest producer of crude oil in the United States. Although the state saw the beginning of oil exploration in the early 20th century, North Dakota did not see its first major oil discovery until 1951. The last 10 years have seen a major increase in output in the Bakken Formation due to the use of horizontal drilling and hydraulic fracturing technology.

Because of its energy-intensive industrial sector, North Dakota ranks in the top five US states in terms of energy consumption per capita, despite its small population. The state’s energy production is nearly seven times greater than its consumption, with about 60% of that production coming from crude oil. Moreover, North Dakota plays a critical role as a US entry point for crude oil pipelines from Canada, further solidifying its importance in the energy sector.

Also, North Dakota has a robust transportation network for its crude oil, relying heavily on rail systems and pipelines to move its production to refineries across the country. Despite challenges like fluctuating oil prices, the state remains a vital part of the US oil landscape, continuing to fuel both the domestic and international markets.

4) Colorado

With an annual production of 165,714 thousand barrels of oil, Colorado is a significant contributor to the American oil industry. Weld County provides 82% of the country’s crude oil production, making it the fourth-largest producer in the US. Almost four times as much crude oil was produced in 2020 in the state as there was in 2010, primarily as a result of improvements in hydraulic fracturing and horizontal drilling. The Denver-Julesburg Basin’s Niobrara Shale formation provides the majority of Colorado’s oil production. Based on proven reserves, the Wattenberg field, which is mostly located in Weld County, is ranked in the top 10 US oil fields.

Despite its energy-intensive mining and oil industries, Colorado uses less energy per dollar of GDP than the majority of other states that produce oil. However, the state’s demand for refined petroleum products is roughly three times its refining capacity. As production from the Niobrara Shale continues to grow, exceeding local refining capabilities, Colorado is expanding pipelines to send crude oil to out-of-state refineries. The state also relies on petroleum product pipelines from Wyoming, Texas, and Kansas, along with deliveries by rail and truck, to meet its energy needs.

Despite these hurdles, Colorado’s oil industry remains resilient, with companies focusing on increasing efficiency and reducing their environmental impact. The state has also invested in infrastructure, including pipelines and storage facilities, to ensure the smooth transport of crude oil to refineries across the US. As a result, Colorado continues to be a significant contributor to the nation’s energy supply while balancing growth with sustainability efforts.

5) Oklahoma

Oklahoma is one of the top producers in the country with an annual contribution of 157,244 thousand barrels of oil. Situated in the center of the Mid-Continent oil region, it is the fifth-greatest producer of crude oil in the United States. The Nellie Johnstone Number One well near Bartlesville in 1897, which ignited Oklahoma’s oil boom, is credited with laying the foundation for the state’s long history of oil production. Notably, J. Paul Getty started his oil business in Oklahoma before starting the Getty Oil Company in the early 1900s. Getty would go on to become one of the earliest billionaires in America.

Oklahoma generates over three times as much energy as it uses, with the production of natural gas and crude oil in its industrial sector accounting for roughly 40% of the state’s energy consumption. The transportation sector contributes to almost 25% of consumption. Much of Oklahoma’s energy output, including petroleum, is transported to other states via pipelines and high-voltage transmission lines. Despite this, the state’s per capita petroleum consumption remains higher than around 80% of the US.

Despite recent challenges such as fluctuating oil prices and regulatory changes, Oklahoma’s oil industry continues to adapt by embracing technological innovations that improve production efficiency. The state’s energy companies have also focused on minimizing their environmental impact, implementing sustainable practices to reduce emissions and water usage. Oklahoma’s oil production remains a critical component of the state’s economy and the US energy landscape, with future growth potential on the horizon.

6) Alaska

Alaska still contributes significantly to the US oil industry, producing 155,465 thousand barrels of oil per year. After the North Slope was discovered in 1967, it grew to become a major oil source and is currently the sixth-largest producer of crude oil in the United States. Beginning in 1977, production from the Prudhoe Bay field once made up 20% of US oil production. As the state’s oil fields have grown older, Alaska’s oil production has gradually decreased from its 1988 peak of 2 million barrels per day. Large uncharted territories, however, continue to present opportunities for discoveries.

The majority of Alaska’s government is funded by the oil and gas sector, which is essential to the state’s economy. This allows Alaska to be the only state without a sales or personal income tax. Also, since 1982, Alaskans have received an annual dividend from the Alaska Permanent Fund, based on oil royalty revenue. Most of Alaska’s oil is transported by tankers to refineries in Washington and California. Despite being the 13th-lowest state in total petroleum demand, Alaska ranks second in per capita petroleum consumption in the US, reflecting its energy-intensive economy and sparse population.

Despite this, ongoing exploration in areas like the National Petroleum Reserve-Alaska (NPR-A) and offshore developments could bring new life to Alaska’s oil industry. The Trans-Alaska Pipeline System (TAPS) remains a critical piece of infrastructure, transporting oil from the North Slope to the port of Valdez, where it is shipped to refineries across the US.

7) California

California produces 112,189 thousand barrels of oil a year, making it one of the most oil-producing states in the US. Its oil business started in the 1800s, but after the Kern River Oil Field was discovered in 1899, it took off. 70% of the state’s oil is produced in Kern County, in southern California, which is the hub of the state’s production.

Heavy crude is extracted in California, which calls for sophisticated methods like steam injection for improved recovery. Approximately 1.7 million barrels of crude oil are processed daily by the 10 largest refineries in the state. Another major factor is offshore drilling, which has platforms close to Santa Barbara along the coast.

The oil industry plays a key role in California’s economy, providing jobs and contributing to state revenues. However, the state also faces increasing environmental scrutiny and regulatory challenges due to its strong focus on reducing carbon emissions and transitioning to renewable energy sources. Despite these hurdles, California’s oil industry remains a critical component of its economy and energy infrastructure, balancing production with environmental considerations.

8) Wyoming

Wyoming is one of the top oil-producing states in the union, generating 97,235 thousand barrels of oil per year. The first oil well at Dallas Dome was drilled in 1884, marking the beginning of the region’s oil history. The Powder River Basin, one of the most productive oil basins in the nation, and the Green River Basin, which is well-known for its conventional oil fields, account for the majority of the state’s oil production.

The production of natural gas and oil is a major source of income for the state and plays a major role in its economy. The vital funds that support public services, infrastructure, and local schools are provided by taxes and royalties from the oil industry. Despite Wyoming’s relatively low population, it has a vast energy output, ranking among the top 10 oil-producing states in the US.

Besides being a major oil producer, Wyoming has a longstanding reputation for energy production, including coal and natural gas. Despite facing challenges like fluctuating oil prices and environmental concerns, Wyoming continues to invest in its oil industry. The state remains committed to balancing energy development with responsible land use, ensuring that oil production stays a vital part of Wyoming’s economic landscape.

9) Utah

With an annual production of 56,196 thousand barrels, Utah contributes significantly to the US oil output. When the Ashley Valley oil field was discovered in 1948, the state’s oil industry took off. Utah’s largest oil-producing area is still the Uinta Basin, which is renowned for producing high-grade waxy crude oil that needs specific refining.

The oil industry in Utah makes a substantial economic contribution to the state, creating thousands of employment and bringing in large amounts of tax money for infrastructure and local services. Due to its five refineries, which can handle approximately 200,000 barrels of oil per day combined, Utah is virtually self-sufficient in terms of fuel production for its industrial and transportation sectors.

The state has also focused on maintaining environmental standards while developing its oil resources, with industry and regulators working together to minimize impacts on local ecosystems. Despite challenges such as market fluctuations and the increasing push toward renewable energy, Utah’s oil industry remains a key player in the state’s economy and energy landscape, ensuring continued growth and production.

10) Louisiana

Louisiana produces 34,515 thousand barrels of oil a year, making it one of the top oil-producing states in the union. The discovery of oil in Jennings in 1901, which initiated Louisiana’s oil boom, was the beginning of the state’s oil history. Deepwater rigs in the Gulf of Mexico, where offshore drilling is permitted, provide a significant portion of the nation’s current oil production.

Louisiana is a refining powerhouse, home to 17 refineries with a total processing capacity of around 3.4 million barrels per day. These refineries are crucial for refining crude oil, both imported and domestic, and for exporting and delivering fuel throughout the United States. The state’s oil sector is vital to its economy, providing thousands of jobs and contributing billions in taxes and royalties that fund local schools, infrastructure, and public services.

The oil and gas industry is crucial to the state’s economy, supporting thousands of jobs and contributing billions in revenue. However, Louisiana’s oil sector faces unique environmental and regulatory challenges, particularly related to hurricane impacts and coastal erosion. The state is actively working on balancing oil production with coastal restoration efforts, ensuring both economic growth and environmental sustainability. Despite these challenges, Louisiana remains a pivotal player in the nation’s oil landscape, bolstered by its vast resources and strategic location.

Conclusion

The top oil producing states in the USA play a crucial role in shaping the nation’s energy landscape and economic future. From Texas to Alaska, these states not only contribute significantly to domestic oil production but also provide essential jobs and revenue that support local communities. As the energy sector evolves, embracing new technologies and sustainability practices, the continued development of oil resources will be vital. Balancing economic growth with environmental stewardship will ensure that these states remain at the forefront of the energy industry, driving innovation and resilience in an ever-changing global market.

FAQs

Which US States Produce the Most Oil?

Texas leads US oil production with over 2 billion barrels annually, followed by New Mexico and North Dakota. These states dominate the nation’s crude oil output.

Which US State Consumes the Most Oil?

Texas consumes the most oil in the US, using around 3.8 million barrels of petroleum products per day, driven by its large population and industrial sector.

Which US State Has the Largest Oil Reserves?

Texas holds the largest proven oil reserves in the US, with over 17 billion barrels, primarily concentrated in the Permian Basin.

Does California Have More Oil Than Texas?

No, California produces significantly less oil than Texas. California generates about 112 million barrels annually, while Texas exceeds 2 billion barrels.