COVID-19 and Lockdown Response Drive Largest Historical Drop in U.S. Oil Production

The U.S. Department of Energy (DOE) reports oil production in the United States fell by eight percent in 2020, the largest single year decline in U.S. history.

The DOE’s March 9 report blames the global Corona virus pandemic and various governments’ responses, such as, forced business closures and stay at home orders, for the decline.

Oil use dropped sharply as did prices, resulting in oil companies reducing production and closing wells.

“In January 2020, U.S. crude oil production reached a peak of 12.8 million barrels per day,” says DOE’s report. “In March 2020, crude oil prices decreased because of the sudden drop in petroleum demand.

“In May, U.S. crude oil production reached its lowest average monthly volume for the year at 10.0 million barrels per day,” the DOE reported.

Production Declines Vary

Because the cost of production is relatively low in Texas, the Houston Chronicle reports, Texas’ oil production suffered just a 4 percent decline, resulting in oil from Texas accounting for an increased percentage of the nation’s oil. Texas oil production amounted to 43 percent of U.S. production overall in 2020.

By contrast, oil production from the U.S. outer-continental shelf (OCS) in the Gulf of Mexico dropped by 13 percent, the biggest production decline recorded in any major domestic oil field. The decline in OCS production resulted not just from COVID-19 and the associated limits on business activity, but also due to the multiple hurricanes in the region disrupting production.

As Coronavirus restrictions eased, oil production in the United States rebounded somewhat. As a result, by 2020’s end, daily oil production in the United States reached 11.3 million barrels per day, less than before the pandemic struck, but representing an increase of approximately 1.3 million barrels per day from 2020’s nadir of production.

H. Sterling Burnett, Ph.D. (hsburnett@heartland.org) is the managing editor of Environment & Climate News.