Oil is found across a wide swath of the United States, but production is heavily concentrated in a handful of states and geologic formations. Texas alone produces more crude oil than most countries, and together with New Mexico and North Dakota, it accounts for the vast majority of domestic output. Oil comes from onshore shale formations, conventional wells, and offshore platforms in the Gulf of Mexico, spread across dozens of sedimentary basins from the Appalachian region to Alaska’s North Slope.
The Top Producing States
Texas dominates U.S. oil production at roughly 5.75 million barrels per day, more than double the output of the next closest state. New Mexico follows at about 2.24 million barrels per day, driven almost entirely by its share of the Permian Basin. North Dakota rounds out the top three at around 1.15 million barrels per day, thanks to the Bakken shale formation.
After those three, production drops significantly. Colorado produces about 467,000 barrels per day, followed closely by Alaska at 421,000 and Oklahoma at 405,000. Wyoming, California, Utah, and Ohio fill out the top ten, each contributing between roughly 139,000 and 289,000 barrels per day. California was once one of the country’s largest oil producers but has seen steady declines over the past several decades.
Major Onshore Oil Basins
Most U.S. oil comes from a relatively small number of geologic formations, often called “plays” or “basins.” These are underground rock layers that trapped oil and gas over millions of years. The shale revolution, which uses horizontal drilling and hydraulic fracturing to extract oil from tight rock, transformed several of these basins from marginal producers into global heavyweights starting around 2010.
The Permian Basin, stretching across West Texas and southeastern New Mexico, is by far the most productive. It contains multiple stacked oil-bearing layers, including the Wolfcamp, Bone Spring, Delaware, and Spraberry formations. The Permian alone accounts for a large share of the country’s total crude output and holds the largest proved reserves of any region.
The Williston Basin in western North Dakota, eastern Montana, and northwestern South Dakota is home to the Bakken Shale, the formation that kicked off the modern shale oil boom. The Eagle Ford play in South Texas is another major producer, located in the Western Gulf Basin. And the Niobrara formation, part of the broader Rocky Mountain sedimentary system running through Colorado, Wyoming, Utah, and Nebraska, drives most of Colorado’s production.
Oklahoma’s output comes largely from the Anadarko Basin, which includes the Woodford Shale and Granite Wash plays and extends into the Texas panhandle. The Barnett Shale in the Fort Worth Basin was one of the first major shale plays developed, though it has historically been more of a natural gas producer. The Appalachian Basin, covering parts of Pennsylvania, Ohio, West Virginia, Kentucky, and New York, is better known for natural gas from the Marcellus and Utica formations but also contributes some oil, particularly in Ohio.
Offshore Production in the Gulf of Mexico
The Gulf of Mexico (officially renamed the Gulf of America for federal purposes) is the center of U.S. offshore oil production. Thousands of platforms operate in its central and western waters, some in depths reaching 6,000 feet. In 2022, the federal offshore Gulf region accounted for about 15% of total U.S. crude oil production, making it a significant contributor on par with some of the top onshore states.
Offshore drilling in the Gulf tends to involve larger, more capital-intensive projects than onshore shale wells. Deepwater platforms can cost billions of dollars and take years to develop, but they tap into massive reservoirs that produce for decades. Alaska also has some offshore activity, primarily in state waters near its northern coast, though the scale is much smaller than the Gulf.
Federal Land, State Land, and Private Land
About 25% of total U.S. oil production comes from federal territory, which includes both onshore federal lands and the offshore federal waters in the Gulf. The remaining 75% comes from state-owned or private land. This distinction matters because drilling on federal land requires federal leases and permits, which can involve longer timelines and different regulatory requirements than drilling on private property.
In states like New Mexico, a large share of oil-producing acreage sits on federal land managed by the Bureau of Land Management. In Texas, by contrast, most production occurs on private land, giving landowners (who typically own the mineral rights beneath their property) a direct financial stake through royalty payments.
Where the Largest Reserves Remain
Proved reserves represent oil that geologists have confirmed exists underground and that companies can extract profitably with current technology. As of the most recent EIA data (year-end 2021), Texas held the largest proved reserves at about 17 billion barrels. New Mexico followed with roughly 4.5 billion barrels, North Dakota with 4.4 billion, and Alaska with 3.1 billion. California, Oklahoma, and Colorado each held between about 1.5 and 1.7 billion barrels.
Alaska is worth noting here. Its current daily production is relatively modest compared to its peak decades ago, but it still holds substantial reserves, primarily on the North Slope. Development there is constrained by extreme weather, remote logistics, and ongoing regulatory and environmental considerations.
These reserve figures shift every year as companies drill new wells, improve extraction technology, and reassess what’s economically viable at current oil prices. A sustained price increase can turn previously marginal formations into proved reserves overnight, while a price collapse can shrink them. The Permian Basin in particular has seen its reserve estimates revised upward repeatedly as operators have found ways to extract oil from deeper and tighter rock layers.