According to EIAs 2004 Annual Report on U.S. Oil and Natural Gas reserves, the United States had 21.4 billion barrels of proved oil reserves as of December 31, 2004, the eleventh highest in the world. These reserves were concentrated overwhelmingly (over 80 percent) in four states. Texas had 22 percent of total US oil reserves, Louisiana had 20 percent, Alaska 20 percent, and California 18 percent (note: all of these figures include onshore plus Federal and state offshore reserves). U.S. proven oil reserves have declined more than 17 percent since 1990, with the largest single-year decline (1.6 billion barrels) occurring in 1991.
U.S. Crude Oil production, which declined following the oil price collapse of late 1985/early 1986, leveled off in the mid-1990s, and began falling again following the sharp decline in oil prices of late 1997/early 1998. During 2004, the United States produced around 7.6 million barrels per day (bbl/d) of oil, of which 5.4 million bbl/d was crude oil, 1.8 million bbl/d was natural gas liquids and 0.4 million bbl/d was other liquids. This compares to the 10.6 million bbl/d averaged during 1985. U.S. crude oil production, which averaged 5.4 million bbl/d during the first eight months of 2005, is now at 50-year lows. 
The United States contains over 500,000 producing oil wells, the vast majority of which are considered "marginal" or "stripper" wells, generally producing only a few barrels per day of oil. During 2004, top oil producing areas included the Gulf of Mexico (1.5 million bbl/d), Texas onshore (1.1 million bbl/d), Alaskas North Slope (886,000 bbl/d), California (656,000 bbl/d), Louisiana onshore (228,000 bbl/d), New Mexico (176,000 bbl/d), Oklahoma (171,000 bbl/d), and Wyoming (141,000 bbl/d).
EIA expects that lower-48 States oil production in 2005 will decline by 340,000 bbl/d from 2004 levels, to 4.17 million bbl/d. For 2006, an increase of 400,000 bbl/d is expected. Much of the 2005 reduction and 2006 rebound is due to the disruption and subsequent recovery of production in the Gulf of Mexico.
Generally speaking, Lower-48 onshore production, particularly in Texas, has been falling in recent years, while offshore (mainly Gulf of Mexico) production has been rising. For 2005, prior to Hurricanes Katrina and Rita in August and September, Gulf of Mexico oil production had been expected to increase as new fields came online in late 2003 and 2004 (e.g., the southern Green Canyon deepwater area). By late 2005, the Mars, Mad Dog, Ursa, Thunder Horse and Nakika Federal Offshore fields had been expected to account for about 12 percent of Lower-48 oil production. Now, with the impacts of Hurricanes Katrina and Rita, this outlook has been thrown into question.
As of November 10, 2005, 46.7 percent of the Gulf of Mexicos 1.5 million bbl/d crude oil production capacity remained offline, with 39.8 percent of the areas 10 billion cubic feet per day (Bcf/d) of natural gas production capacity also down. EIA currently expects about 23 percent of the Gulfs crude oil production and 21 percent of its natural gas output to remain shut down through March 2006. Overall, through November 14, Hurricanes Katrina and Rita had caused a loss of nearly 86 million barrels of U.S. crude oil output, and over 440 Bcf of natural gas output. In addition, around 804,000 on bbl/d of crude refining capacity remained offline as of November 9.
The destructive 2005 hurricane season came as the Gulf of Mexico had just about fully recovered from Hurricane Ivan in late September 2004. That storm had also caused significant disruptions to Gulf of Mexico operations, with 102 pipelines affected and 27 platforms either destroyed or badly damaged. According to an assessment by the U.S Department of Interiors Minerals Management Service (MMS), "Of the 4,000 structures and 33,000 miles of pipelines in the gulf....150 platforms and 10,000 miles of pipelines were in the direct path of Hurricane Ivan"