Official data from Argentina’s Ministry of Economy showed oil production reached an all-time high of

, rising 0.6% from April and nearly 19% higher than the same month last year.

Natural gas production also surged to

reflecting continued growth in unconventional drilling, energy news site OilPrice.com reported.

The production gains come as Argentina seeks to strengthen its economy through energy exports while global oil markets remain sensitive to geopolitical tensions, including conflicts in the Middle East that have heightened concerns over supply security.

At the centre of the expansion is Vaca Muerta, an 8.6-million-acre shale formation widely regarded as one of the world’s largest unconventional hydrocarbon resources.

The basin supplied more than

in May, marking a record share of national output. Shale gas also reached its highest contribution to the country’s total gas production.

The formation is estimated to contain

placing it among the world’s most significant shale resources.

Argentina has already overtaken Colombia to become South America’s fourth-largest oil producer, with Vaca Muerta expected to drive further gains over the coming decade.

The shale boom is attracting billions of dollars in fresh investment despite global uncertainty.

State-controlled

plans to spend

in capital expenditures during 2026, with roughly 70% allocated to unconventional operations in Vaca Muerta. Between 2025 and 2030, the company has outlined investment plans totaling

primarily focused on expanding shale production.

Combined upstream investment in the basin is expected to exceed $10 billion this year, while new pipelines, storage terminals and export infrastructure are being built to ease transportation bottlenecks that have limited production growth.

Industry analysts say Vaca Muerta possesses several competitive advantages.

The formation contains thick shale layers, high reservoir pressure and high organic content, allowing wells to remain productive for longer periods.

Breakeven costs are estimated at $

making many projects competitive even during periods of lower oil prices.

The basin also produces

with low sulfur content, making it cheaper and easier to refine than many heavier crude grades produced elsewhere in South America.

Operators also point to relatively low carbon intensity compared with the global industry average, although environmental organisations continue to raise concerns about the broader climate impacts of expanding fossil fuel production.

Analysts expect Argentina’s crude output to climb to

provided planned investments and infrastructure projects proceed on schedule.

If realised, the expansion would transform Argentina into a far more significant energy exporter, boosting foreign exchange earnings and strengthening its position in global oil markets at a time when many countries are seeking diversified sources of supply.