Record West Texas oil output helps stabilize U.S. supply amid Iran war
American oil output in West Texas helped maintain steadier U.S. energy supply while the Iran war squeezed global production and intensified market volatility, according to industry groups and an Energy Information Administration report reviewed by analysts.
The EIA reported that U.S. oil companies produced 13.6 million barrels per day last year, setting another production record, and that almost half of that total—6.6 million barrels a day—came from the Permian Basin, a large patch of oil-rich deposits spanning west Texas and southeast New Mexico.
Texas produced nearly half of all U.S. oil last year even though the state drilled fewer new oil wells in 2025, a pattern described by industry analysts and groups as linked to Permian geology, transportation networks, and the ability to manage multiple production sites quickly.
The Iran war added a new geopolitical context to domestic output, supporters of the Permian’s performance said. They pointed to higher gas prices during the conflict and argued that the global supply squeeze could have been worse for the United States without sustained volumes coming from the Permian.
Ben Shepperd, president of the Permian Basin Petroleum Association, said the Permian’s production helped keep the country and its allies from facing more volatile conditions. “Without the millions of barrels produced a day in the Permian Basin there’s no question we’d be in much more volatile times,” Shepperd said. “The strong production coming out of the Permian Basin, however, helps provide a stable source of energy for the United States and our allies, which can reduce volatility when conflicts arise in other parts of the world.”
Texas industry officials also tied the current record levels to longer-running increases. Todd Staples, president of the Texas Oil and Gas Association, said that 10 years ago oil companies drilled 9.2 million barrels of oil using 1,543 rigs, and that in 2025 oil companies produced more than 13 million barrels with only 582 rigs. Staples said operators’ ability to adapt quickly supported competitiveness, even as markets shifted.
Geology and operating techniques were central to that explanation. The Permian’s underground layers of rock allow operators to extract at different depths, and operators can move between wells in hours rather than days, drill multiple wells from a single site, and drill in multiple directions at different depths, according to the account reviewed.
Other experts cautioned that the benefits of current output could be limited if rig counts keep declining. Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, said depressed rig counts raise concerns about future production sustainability, warning that if the trend continues without offset, operators could face slower inventory replacement and a potential plateau or gradual decline over the medium term, particularly if new drilling does not keep pace with natural decline rates in existing wells.
The report also linked the market shock from the Iran war to disruptions affecting global oil flows. Industry figures and experts said the conflict’s impact included short-term economic windfalls for oil companies and higher prices tied to the closure of the Strait of Hormuz, which they said cut 20% of the world’s oil, and they pointed to how prices rose to at least $114 a barrel before a ceasefire on Tuesday.
Stephen Sagriff, director of intelligence at Enverus, said West Texas output functioned as a counterweight to disruptions in the Middle East and could provide “geopolitical leverage for the U.S.” Don Murchison, director of global strategy at RINA North America, said the Permian lessened dependence on oil from other nations, and he said the patch can produce more oil at lower cost than other states.