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Oil theft has been part of the Texas oil patch since the earliest days of wildcatters. But officials say today’s version of “oil rustling” has become more organized, more sophisticated and far more dangerous.
In March 2025, that danger lit up the night sky in Reeves County, when a pipeline caught fire and exploded after what investigators described as an attempted theft of petroleum products.
The fire was contained before it spread to populated areas or to a nearby natural gas pipeline.
Tim Murphy with the Texas Department of Public Safety described the incident during recent testimony before the Texas House Energy Resources Committee.
“They cut into the pipeline and tried to tap directly into the main pipeline,” Murphy said. “It sparked and it blew. They blew up everything in the area, but the pipeline burned for several days.”
Officials say the Reeves County explosion shows oilfield theft is no longer simply a property crime. It can threaten workers, nearby communities and critical energy infrastructure.
That infrastructure is everywhere in West Texas. The Permian Basin, which stretches across West Texas and southeastern New Mexico, is the nation’s largest oil-producing region. The U.S. Energy Information Administration said the Permian accounted for almost half of all U.S. crude oil production in 2025, producing an average of about 6.6 million barrels per day.
Across the flat, dusty landscape are pumpjacks, storage tanks, drilling pads, and pipelines — all part of an energy system that helps supply the country, and all potential targets. Each is a tempting target for a would-be oilfield thief.
“It’s like any other commodity,” said Jim Wright, chairman of the Texas Railroad Commission, the state agency that regulates oil and gas production. “When the price is high, they just get sexier.”
Wright said thieves are often sophisticated. Some, he said, disguise tanker trucks to look like legitimate oilfield service vehicles.
“They’re cloning these trucks,” Wright said. “They can take a truck and get a full load of oil and not be noticed.”
The stolen crude can then be moved through brokers and resold into the market. Federal officials have also warned that Mexican cartels have been involved in stealing oil from Pemex, Mexico’s state-owned petroleum system, including from pipelines and refineries. Mexico’s stolen oil is smuggled into Texas where it is sold.
The scale of the problem is difficult to measure. Wright has said roughly 40% of the industry has experienced some form of theft, and losses may reach as high as $1 billion annually. Dallas Federal Reserve survey data showing more than 40% of oil and gas operators reported theft had affected their operations in the prior year.
Recent federal charges point to the size of some alleged schemes. In April 2026, federal prosecutors in North Texas announced that 14 defendants from Texas and New Mexico had been indicted in what authorities called a large-scale oil theft conspiracy in the Permian Basin. Prosecutors allege the defendants conspired to transport stolen crude oil across the New Mexico-Texas border for resale.
Local law enforcement officials say they are outmatched by the size of the oil patch and the complexity of the industry.
Howard County Sheriff Stan Parker said his county alone sees “probably over 1,000, 1,500 barrels of oil reported stolen every month.” He said deputies don’t have the expertise to identify and investigate oilfield thieves.
“Our problem is we don’t know who’s supposed to be there and who’s not,” Parker said. “If I pulled up on a tank battery right now, I don’t know if you can be there or you’re not. I don’t know if you’re drawing water off of it. I don’t know if you’re pulling oil. It’s got very complicated.”
Texas lawmakers have responded with new laws aimed at tightening enforcement. Gov. Greg Abbott signed a package of oilfield theft bills in June 2025. House Bill 48 created an organized oilfield theft prevention unit within DPS. Senate Bill 494 established the State Task Force on Petroleum Theft, known as STOPTheft. Senate Bill 1806 gave trained officers authority to inspect cargo tanks carrying petroleum products and collect samples for forensic testing.
The STOPTheft task force includes representatives from industry, local and federal law enforcement, DPS and the Railroad Commission. Its duties include reviewing theft laws, studying the effect of petroleum theft on state tax collections and long-term economic impacts, and recommending law enforcement training.
The state also increased criminal penalties. Under the enrolled version of Senate Bill 1806, theft of petroleum products or oil and gas equipment is now a third-degree felony if the value is under $10,000, a second-degree felony from $10,000 to under $100,000, and a first-degree felony at $100,000 or more.
In Texas, those penalties can range from two to 10 years in prison for a third-degree felony, two to 20 years for a second-degree felony, and five to 99 years or life for a first-degree felony.
