Market Snapshot: Vastly different trajectories for crude oil production in Canada, the U.S., and Mexico over the last 25 years

Release Date: 2016-11-16

Since 1990, Canadian crude oil production has grown steadily, with notable dips only in 1999 and 2005. In contrast, production in the United States (U.S.) steadily declined from 1990 to 2008, but then rapidly increased starting in 2009.Footnote 1 Mexican production increased steadily until 2004, and then declined in the years that followed. By 2015, crude oil production in Canada, the U.S., and Mexico was 249%, 128%, and 88% of 1990 production, respectively.Footnote 2

Source and Description

Source: Statistics Canada (1990-1997 Canadian production data), NEB (1998-2015 Canadian production data), EIA, BP, and NEB calculations.

Description: This line graph compares an index of crude oil production in Canada, the U.S., and Mexico from 1990 to 2015, with 1990 as the base year. Canadian oil production has been growing steadily since 1990, with the rate of growth increasing since the late-2000s. U.S. oil production fell steadily from 1990 to 2008, and then increased sharply until 2015. Mexican production grew from 1990 to 2004, and then declined back down below 1990 levels by 2015.

Oil prices have fluctuated considerably during the past 25 years and do not always correlate with oil production trends in the three countries. However, strong price growth between 2002 and 2011 appears to have spurred the discovery and development of new sources of supply, as well as the adoption of new technologies. For example, advances in oil sands production methodsFootnote 3 supported growth in Canadian production during and following this period. U.S. oil output revived in the late 2000s thanks to horizontal drilling and hydraulic fracturing (“fracking”), which allowed the U.S.’ vast shale oil resources to be developed.

In contrast, Mexican production fell steadily after peaking in 2004. Unlike the U.S. and Canada, Mexico’s constitution prohibited competition and direct foreign investment in its oil industry and limited its upstream market to one state-owned producer. This policy changed in August 2014, when the Mexican government, seeking to reverse its falling production over the preceding decade, opened its oil industry to private companies.

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