As crude prices hovered at break-even levels and global production remained strong, the number of jobs in the upstream oil and gas industry in Texas decreased by about 3,000 during June and July.
Employment in Texas oil and gas fields declined this summer as crude prices remained close to break-even points and global supplies continued to be abundant, sparking concerns about a potential downturn in the industry.
In June and July, approximately 3,000 upstream workers, representing around 1.5% of the sector's workforce, were reported to have lost their jobs, according to the Texas Workforce Commission. In June, approximately 1,500 positions were eliminated, followed by an additional 1,400 in July, undoing the slight improvements seen earlier in the year.
Experts in the field indicate that the losses highlight the precarious condition of the sector, which continues to be affected by fluctuations in worldwide demand, unpredictable investment markets, and the persistent consolidation among leading producers.
“While two months may not definitively indicate a trend, it does align with our expectations,” stated Karr Ingham, president of the Texas Alliance of Energy Producers. “Should prices continue to be low and rig counts stay weak, history shows that more layoffs typically follow.”
In May, West Texas Intermediate crude prices fell to $62.17 a barrel, marking the lowest level since mid-2023, a period when the sector was still recovering from the pandemic's impacts. Throughout July and August, prices experienced fluctuations but have stabilized around $63 a barrel as of August 26.
While the recent job losses are significantly less than the 63,000 positions lost during the peak of the COVID-19 downturn, Ingham cautioned that they indicate a halt in progress following two years of consistent employment growth. Employees who spoke with the Chronicle on the condition of anonymity expressed their difficulties in securing new job prospects, with several saying, " I am contemplating either a complete departure from the oilfield sector or pursuing retraining for more reliable positions.
The recent consolidation has intensified the pressure. In the wake of its acquisition of Hess in July, citing restructuring efforts, Chevron announced plans to eliminate 575 positions at the Houston office of the acquired company. In June, Encino Energy revealed plans to reduce its workforce by 121 employees at its Houston headquarters following its acquisition by EOG Resources.
In the meantime, the trend of outsourcing support roles, such as information technology, accounting, and security, to more affordable countries, including India and Indonesia, has continued to diminish opportunities for employees based in Texas.
As we move forward, Ingham highlighted that the crucial factors for upstream workers continue to be crude prices, rig counts, and drilling permits. He stated that if oil prices are considerably lower in 2025 compared to 2024, job reductions may accelerate.
“The pressing inquiry is, ‘Are we genuinely on the path to $50?’” Ingham stated. “I certainly hope that’s not the case.” It’s unlikely we’ll reach that point, but at this moment, none of us has the answer.
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