(The Center Square) – The Texas oil and natural gas industry is showing signs of employment improvement after reporting months of job losses.
Employment in the upstream sector increased by 400 jobs between July and August, according to the latest Current Employment Statistics report from the U.S. Bureau of Labor Statistics. This reflects a decline of 100 jobs in oil and natural gas extraction (62,600) and an increase of 500 service sector jobs (133,300), according to an analysis of the data by the Texas Independent Producers and Royalty Owners Association (TIPRO).
The upstream sector includes oil and natural gas extraction and related support activities. It excludes refining, petrochemicals, pipelines, and equipment manufacturing, which support hundreds of thousands of additional jobs in Texas.
“These upstream positions support an additional 232,000 indirect jobs within the supply chain and 420,000 induced jobs supported by household spending across the economy,” the Texas Oil & Gas Association said in a statement. “In total, the upstream oil and natural gas sector alone sustains a total of 848,000 direct, indirect, and induced jobs.”
Total upstream salaried employment reached 195,900 in August, up 500 jobs from August 2025, TXOGA says. Since September 2020, the upstream sector has increased by 38,900 jobs, a gain of nearly 25%, it says.
The Texas oil and gas industry reported 192,400 jobs in January peaking to 197,300 in May, then declined in June and July to a revised 195,500 jobs before increasing to 195,900 in August, TIPRO said. August’s total is 1,400 jobs, or 0.7% below the May peak, it added.
“Measured against the January starting point, upstream employment is up 3,500 jobs, or 1.8 percent, for the year. That net gain reflects a much larger increase of 5,800 jobs from a February low of 191,500 to the May peak of 197,300, following an early-year decline of 900 jobs in February. The June and July losses of 300 and 1,500 jobs, respectively, subsequently gave back a portion of that spring gain,” TIPRO said.
August’s 400-job increase ended the first back-to-back monthly losses of the year.
“Month-to-month fluctuation of this kind is common in upstream employment data over the course of a year,” TIPRO added. “This period has been no exception, with declines in three of the seven monthly changes recorded so far, including the 900-job drop in February and the 1,500-job drop in July, the steepest monthly decline of the year.”
TIPRO also points to strong job postings for the Texas oil and natural gas industry indicating that the industry is weathering challenging economic conditions. The industry posted 11,641 unique jobs in Texas in August, with 4,837 new job postings added during the month, according to state employment data. Texas leads the U.S. with jobs in the industry, followed by Pennsylvania, California, Ohio and New York, according to BLS data.
A new U.S. Energy Information Administration September 2026 Short-Term Energy Outlook projects that domestic crude oil production will break records this year, led by producers in the Permian Basin in far west Texas and southeastern New Mexico.
The EIA projects a record average 13.8 million barrels per day (b/d) produced in 2026, surpassing the previous high of 13.7 million b/d set in 2025. The EIA attributes the record production to increased drilling activity in the Permian Basin, where oil output is expected to average 6.8 million b/d this year, representing a 3% increase over the year.
Domestic natural gas output is also projected to reach historic highs this year, according to the EIA outlook. It projects that U.S. marketed natural gas production will average 122.9 billion cubic feet per day (Bcf/d) in 2026, an increase of 4.5 Bcf/d over last year. It also says production is expected to increase another 4.6 Bcf/d in 2027 to reach 127.6 Bcf/d.
Both the Permian Basin and Haynesville Shale in northeast Texas and northwest Louisiana account for more than 70% of production growth, according to EIA data.
“August’s 400-job increase after two months of decline shows that Texas oil and natural gas producers continue to hire even as costs rise and markets remain unsettled,” TIPRO president Ed Longanecker said. “Job postings remain strong, production is headed for another record year, and Texas output is the principal safeguard against global supply disruptions.”
“The industry still needs additional infrastructure to move production to market, more dispatchable power and transmission in the producing regions, and permitting reform that matches the scale and capital intensity of these operations,” he added after urging Congress to act on permitting reforms.
As Middle East and Persian Gulf conflict continues, TXOGA President Todd Staples added, “One of the best hedges against geopolitical shocks is controlling your own energy supply. The men and women who explore, drill, and produce are an integral reason Texas leads the nation in energy production and why America remains the world's leader in delivering safe, reliable energy.”