New Mexico’s oil and gas industry is bracing for another round of volatile ups and downs in crude prices that could push the market – and ultimately production in the southeastern part of the state – to its lowest point in more than a decade.

The industry has already been battered by steep price declines over the past year that cut the price of crude from more than a $100 a barrel in mid-2014 to about $44 now. That’s led to thousands of layoffs in New Mexico’s oil patch in the southeastern part of the state and, to a lesser extent, in the northwestern San Juan Basin.

But things may get a lot worse thanks to Iran, which is expected to aggressively ramp up its oil production next year as international sanctions are lifted following last summer’s deal designed to limit Iran’s ability to develop a nuclear weapon. Iran has enough oil reserves to rival Saudi Arabia on world markets and, as it begins to flood the West with new crude, prices are likely to crash to levels not seen since 2003, said Daniel Fine, associate director of the New Mexico Center for Energy Policy at the New Mexico Institute of Mining and Technology.

“Once Iran is able to export to western markets, it can rapidly move back to its full capacity, which in 1979 was 5.7 million barrels per day – second only to Saudi Arabia,” Fine said. “If Iran produces what it’s qualified to produce, world oil prices could drop back to the 2003 range of between $23 and $28 a barrel, which would have severe consequences for New Mexico. Harder times are coming.”

At $23 to $28 per barrel, New Mexico production would hit bottom, said Gregg Fulfer, Lea County Commission chair and owner of the Fulfer Oil and Cattle Co. in Jal.

“When Iran comes back on, we could easily see another $15 per barrel drop in price,” Fulfer said. “That will really hurt us. They’d be putting a lot more crude on an already over-supplied market and I think we’ll see our economy tank a lot more than today.”