On July 16, 1926, however, oil was discovered in Hendrick oilfield, near Kermit, and the town experienced a boom.

During the 1940s, the oil boom caused real estate prices to double.

By 1960, the city had a population of 10,465 and 260 businesses, and additional growth estimated to be over 12,000 during the decade.

The town moved the last working wooden derrick in the Permian Basin from Loving County to Pioneer Park in Kermit in 1966 as a symbol of the importance of the oil industry to the economy of Kermit and Winkler County.

Improvements were made in city services, and more housing additions were built.

On June 3, 1980, a 9-ft-wide (3 m) sinkhole opened on the property of Atlantic Richfield Company and got progressively larger.

According to the United States Census Bureau, the city has a total area of 2.5 square miles (6.5 km2), all land.

This area has a large amount of sunshine year round due to its stable descending air and high pressure.

As of the 2020 United States census, there were 6,267 people, 2,096 households, and 1,493 families residing in the city.

[20] In July, 2017, the U.S. Environmental Protection Agency gave Kermit a federal Superfund designation, marking it as one of the most hazardous waste sites in the country.

The EPA said in a statement that a portion of the Santa Rosa Aquifer in Kermit has been added to the Superfund program's National Priorities List.