Argentina's oil output hit an all-time high of 887,227 barrels per day in May 2026, 19% above the same month a year earlier, with shale oil from the Vaca Muerta formation making up 70.6% of total oil production. Estimates put 2026 upstream investment in the play at around $10 billion, and analysts expect output to reach one million to 1.5 million barrels daily by 2030.
Argentina's oil output reached an all-time high of 887,227 barrels per day in May 2026, according to Ministry of Economy data. That was 0.6% above the previous month and a 19% gain on the same period a year earlier.
Natural gas moved the same way. Output rose to 5.5 billion cubic feet per day, just shy of the record 5.7 billion cubic feet daily reported for July 2025. Production was 5.4% greater than a month prior and 11% higher year over year.
Shale now supplies more than two-thirds of output
Behind the gain sits the 8.6-million-acre Vaca Muerta formation. Shale oil made up 70.6% of Argentina's total oil production in May 2026, while shale gas made up 69.8% of total output, both record proportions.
Argentina also recently overtook Colombia to cement its place as South America's fourth largest oil producer. The formation holds an estimated 16 billion barrels of recoverable oil and 308 trillion cubic feet of recoverable natural gas resources.
Vaca Muerta breaks even at $36 to $45 per barrel
Drilling economics explain the pace. The play carries an estimated breakeven cost of $36 to $45 per barrel, which is lower than most U.S. shale plays. Its light sweet crude oil has an API gravity of 39 to 41 degrees and sulfur content of less than 0.5%, which makes it easier and cheaper to refine than the heavier sour grades produced throughout much of South America.
Emissions also run below the industry average. Oil lifted in the formation carries a carbon intensity of just under 16 kilograms of carbon dioxide per barrel, while YPF, the largest acreage holder and producer in the Vaca Muerta, claims only 12 kilograms per barrel of its own shale oil, against a global oil industry average of 23 kilograms.
Producers commit billions to 2026 drilling
Estimates put 2026 upstream investment in the Vaca Muerta at around $10 billion. YPF budgeted 2026 capital expenditures of $5.8 billion, with around 70% to be spent on its unconventional acreage in the play, up from the $4.5 billion invested during 2025.
Private producers are spending too. Their 2026 investment is expected to exceed $4 billion, with Vista Energy committing $1.5 billion and Pluspetrol planning $800 million this year. Pan American Energy, the Vaca Muerta's second largest oil producer, lifted an average of 99,109 barrels daily for the first five months of 2026 and allocated $586 million for its 2026 capital expenditures.
For these reasons, analysts expect Argentina's oil production to reach one million to 1.5 million barrels of crude daily by 2030, while natural gas output soars to over 6 billion cubic feet per day. Those numbers could be significantly higher if YPF's $25 billion investment through the Large Investment Incentive Regime succeeds. Meanwhile, production constraints from a lack of midstream infrastructure are being addressed with new pipeline and storage facilities under development.
Source: Oilprice.com
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